We all know that working in the yacht industry comes with a lot of perks, but I think we can all agree that a tax-free salary is one of the best things of being a yachtie.
It is always best to remember that yachts may not entirely deduct Tax from your salary when you are paid but unless stated otherwise, all crew onboard are purely responsible for handling their own personal income tax which means doing their research on tax rules and regulations and seeking official advice if needed to remain up to date with the national requirements.
There are many factors that can affect whether you owe tax but one main important factor to consider is residency which means that the country that you are a resident of is the country that you pay tax to, the tax regulations of that country. Some countries make allowances for sea farers for the mere fact that you work offshore and spend a relatively small amount of time at home. Another challenge that crews needs to be aware of when it comes to tax, and which authorities are increasingly clamping down on is gross pay. Gross pay is the amount paid before taxes and other deductions. With a crackdown on crew being offered gross pay by owners and operators, there is an increasing pressure on employees to identify and address any potential liabilities.
Yachting and Investments… Show me the money!
If you have been in the industry for a while, chances are you are looking or have already invested on something whether it’s a new property, bank products, bonds or stocks.
Does crypto ring a bell? We thought so!
We know a lot of crew who have jumped on the crypto bandwagon in the last few months. We hear positive stories about crew making great profit but what we don’t hear about is how much money can you lose if your investment didn’t go so well. The matrix of stocks is quite a complicated thing to grasp especially if it isn’t your area of expertise.
So the big question is, do you know what you’re doing?
2022 has been a rough year for crypto so far with major cryptocurrencies’ prices plummeting over the last two months. While falling prices can be concerning, it’s also a fantastic opportunity to “buy the dip” and “get into the swing of things”. Taking advantage of the price drop can be beneficial and right now is one of the most affordable times to invest.
But does that mean it’s a smart investment? Here’s what you need to know.
There are three things all crew need to understand when investing in Crypto currency:
- You need to do some research. Investing in anything without a clue what you are doing is not the way forward.
- Only invest what you can afford to lose.
- If you make or lose money trading Crypto you need to declare it on your tax return.
…and there’s the T word again…
Like with most investments, if you make money doing something, you will need to declare it.
We have been getting a surge of enquiries from candidates asking questions such as
- How do I hide my crypto gains, so I don’t have to pay tax on them?
- I’ve made a lot of money trading Crypto. Can I become a resident of Panama to avoid paying tax on them?
- Crypto is untraceable, isn’t it?
At the end of the day, it all comes down to this:
You are in a very fortunate position of not having to pay tax on your salary because of the allowance the UK government permits sea farers due to not being able to spend a significant amount of time in the country. Unfortunately, this does not apply to your investments or “gains” made elsewhere which means that any profit made from your investment by selling or trading crypto currencies will have to be filed and declared on your tax return.
The take-away on this is always do your research if unsure.
For more details regarding tax on crypto assets – check out https://www.gov.uk/government/publications/tax-on-cryptoassets.
Please note: the advice link is only for UK residents