St James Place : Exit Strategies

 

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If you plan for your exit from the yachting industry just before you leave it it will be too late. In reality you should start planning your exit at the start of your career, though few people have the foresight to do so. As optimists we will all naturally assume that any exit will be on our own terms and at a time of our choosing Reality of course can be different whereby illness or accident can result in you being unable to continue to work in the industry at any time.

The factors to be considered when leaving the yachting industry are similar to those when exiting a business * except that many yachtsmen will have worked away from their home tax jurisdiction and will probably have not paid much if any tax.

One of the first areas to consider is what will be the financial impact of you returning to live and work in a taxed environment. Therefore, it is essential to take advice as to the impact of such a decision and also when would be the most opportune time to move back into the tax system of wherever you are intending to live.

One thing that needs to be considered long before any decision is made to leave the industry and that is protection for you and/or your family i.e. life assurance, medical cover, accident and sickness protection. Within the industry many boats offer life and other cover whilst you are employed on that boat. Quite often such cover is literally only valid when you are on the boat and not even in the dockyard or ashore. This, therefore is something that should be checked out when the employment package is being discussed. Additionally, this is an industry in which people move from boat to boat quite frequently and therefore potentially will have periods when they have no cover. For somebody who has a family that would rely on an insurance pay-out in the event of death/ accident or injury it would be catastrophic were this to occur at a time of no cover. Therefore at an early stage in your career you should consider taking out your own protection insurance (in addition to that provided by the boat) to ensure continuity of cover wherever you are and whatever you are doing. A further reason for taking cover out at an early stage is that medical conditions that develop later in life may then make you uninsurable whereas having cover already in place means that this would not be an issue in such circumstances. Finally you should ensure that any cover implemented is valid worldwide.

For those crew who have planned in advance and have pensions and/or investments there is a need to see how they will fit in to the tax regime of wherever you are going to live. An example of how not to do things are the many British citizens who go to live in Spain and become Spanish tax resident whilst retaining their existing UK based investments, only to find that what were tax efficient investments in the UK are just the opposite in Spain .The lesson here is that you need to ensure in advance that the pensions/ investments that you hold are appropriate for the tax regime under which you are going to live and if not do something about it!

If all the above sounds too daunting, do not be deterred from taking action, why not join us at one of the no obligation financial clinics we are holding at the Real Club Nautico Palma on Monday 5th October and Friday 9th October between 10am and 1pm, to discuss your personal situation in confidence. To make an appointment, simply use the contact details below.

Alternatively if those dates are not convenient and you would like to receive a complimentary guide covering Wealth Management, Retirement Planning or Inheritance Tax Planning, produced by St. James’s Place Wealth Management, contact Roy Duns of St. James’s Place Wealth Management on 0044191 3851530 or www.sjpp.co.uk/royduns.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

*Exit strategies may include the referral to a service that is separate and distinct to those offered by St. James’s Place.

Representing only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.

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