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Sam
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I am a UK resident. I am employed as an Officer on a Bahamas

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I am a UK resident. I am employed as an Officer on a Bahamas flagged ship and as such I don't pay NI or Income tax. I file a annual tax return, but claim a 100% seafarers earning deduction.

I am currently paying £300 per month into a virgin pension scheme and receive £75 tax relief ontop of my £300. I do not have a company pension plan.

I would like to dramatically increase my pension contribution but am not sure where I stand.

I am 29 years old.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.

Hello, I'm Keith and happy to help you with your question.

Under UK tax rules you can pay up to 100% of your earnings up to an annual limit of GBP 50K (13/14 tax year), 40K (14/15), into pension scheme(s). As you probably know you get relief by paying contributions net ie for every 100 quid you only pay 80, the pension providor claims the 20. What you may not realise is that you can utilise unused allowanes from the previous 3 years to boost contributions and hence relief, but still subject to the 100% limit however. Your age is irrelevant, it wasn't in the past, but it is now.

Hope I have been of help.

I do have an quite different point for you. I recently returned from a cruise in a ship registered in Hamilton. I was an army officer at one time and a 1st Lieutenant in a Landing Craft MKVIII. The cruise liner and its tenders wore the Red Duster which interested me as the ensign for the registration country is actually a defaced one. Maybe you could throw some light, please, if you have a moment.

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Customer: replied 3 years ago.
Thank you - that does answer my question.

I used to work for Cunard as Chief Officer, but left the company shortly before carnival flagged the Cunard (and P&O) fleet out to Bermuda. (I assume your sailed with either Cunard, P&O or Princess?)

Your point about the defaced ensign also annoyed me, as I felt that they should really be flying the 'true' colours, however, because the ships are 'owned' in the UK they have been granted a dispensation to fly the undefaced ensign.

The tenders are actually classed as 'class 7 passenger vessels' and are all subject to their own inspections and actually are registered with the flag state individually.
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

It was a Princess, but I couldn't get hold of a deck officer to ask! As you say it's a fudge! Funny story; we were proceeding up the inner channel Portsmouth to Southampton and I had the watch when the old QE2, dressed over all, on her maiden voyage was coming out. My signals corporal immeditely flahed her up on the Aldis. 'What are you making, Corporal?' I asked him. 'What ship, Sir, no recognition hoist!' which as you probably know is compulsory between the Nab and the Needles. We didn't get a reply from the Cunarder, but her registration letters came flying up her yardarm. I'm surprised Calshot Signal Station hadn't picked her up on it. Red faces all round on her bridge I suspect.
Expert:  Sam replied 3 years ago.
I am afraid the advise my colleague gave you is incorrect, as your earnings are deemed tax free in the UK due to the seafarers scheme, you can only contribute a maximum of £3600 that will attract tax relief upon (you can of course make as large a contribution as you wish, but this is all that will be entitled to tax relief)
Expert:  bigduckontax replied 3 years ago.
As you can see there is a difference of opinion between experts. HMRC guidance on this matter is not well framed and does not actually mention TAXED income, just income. I would thus argue that you are entitled to make these contributions. However, I did advise you to seek advice from an IFA before investing and he will doubtless put you in the picture with his advice.
Expert:  Sam replied 3 years ago.
Hi

Here is the relevant legislation
There is nothing vague about the legislation with what constitutes net relevant earnings and my colleagues own personal thoughts to what constitutes taxed income - see attached link and scroll down to "what if you do not pay tax" http://www.hmrc.gov.uk/incometax/relief-pension.htm and more specifically in relation to residency (and you are permitted to have your income paid tax free under the seafarers scheme, as you are treated as not resident for UK tax purposes, hence whay all the days in and out of the Uk are counted) http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm13103020.htm - Cannot get much clearer that that, I am sure you can agree


I can only apologise that you have been misinformed

Thanks

Sam
Sam, Accountant
Category: Tax
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Expert:  bigduckontax replied 3 years ago.
I agree that interpreted that way there is no argument, however if seafarers allowance were underclaimed this would release income which can be mopped up by pension contributions. HMRC may not like it, but I submit that it is a possible route through this maze.

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