How to avoid paying tax

[KellysEye]

>There is a specific scheme for seafarers: http://www.hmrc.gov.uk/cnr/seafaq2.htm

The tax rules for seafarers are different from a live aboard boat on the move where the skipper and crew are not in employment but may have income in the UK such as a pension or house rental. We had the latter a house and flat. You can avoid capital gains tax on a rental property if you sell it before you come back which we did.

 

[GHA]

I think the key thing is where the income comes from. If you are paid by an off-shore company, as many merchant seamen are, and you are out of the UK for more than six months each year, then you can apply for special taxation. I know a couple of merchant seamen who do this.

If the income is generated in the UK, for example UK pensions or property letting, then I believe you have to pay UK tax on it, even if you are non-resident. I've been resident in Greece for over 10 years. I still have to pay tax on any UK income but I don't have to pay UK tax on what I earn in Greece.

A few years ago now but when I was sailing non resident, it didn't matter where the company who paid you was based, just where the work was carried out.

 

[Ric]

You are right. Becoming non-resident cuts you off from the NHS and means you can't get an EHIC so you are on your own healthwise. In fact you can lose rights to NHS with an absence of only 3 months from the UK, although in practice this does not happen often - it is designed to stop "health tourists".

You also need to consider all the otheer long term benefits of being a UK taxpayer, such as rights to benefits and particularly state pension. Many people keep UK residency and maintain some form of UK address just to be sure that they can access these services in the future. If you have children that might want to go to University, they will become overseas students and therefore have to pay full fees without access to grants, loans etc.

Becoming non-resident is a major step and you need to be sure that you can support yourself long term with the resources you have.

Good professional advice clearly needed.

I am in a similar situation, in that I work abroad in Africa for six months per year, then spend the remainder of the year mostly on my boat in the Med, but a month or so in my house in France or at my other home in UK. I was a French tax resident until last year until Hollande decided that even if you only visit your home in France a couple of months per year, you still have to pay tax on worldwide income - but at the same time you no longer qualify for French healthcare unless your overseas contract is a French contract! Obviously this is completely unfair - and is now the subject of an investigation by the EU. But in any case, my answer was simple - I transferred my residency to my UK address (I am in neither UK, nor France for more than a couple of months a year, so I have the choice). I now declare my income in UK, pay any tax thereon, then claim it back as I am not in UK for more than 183 days per year. I also now get access to NHS etc.

I suggest that you do as Tranona says - remain a UK resident. However, once you have paid your taxes, you just fill in a form showing that you are out of the country and offer proof if necessary, then you get your tax back.

You need to be well organised to prove that you are out of the country. I keep EVERY receipt for everything I buy (including supermarket groceries receipts) and also all airline boarding passes. If ever they query my whereabouts, I have a detailed dossier already prepared.