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HMRC internal manual

Employment Income Manual

Foreign service: definition of 'foreign seafaring service'

Section 414B ITEPA 2003

EIM13680 explains that a payment or other benefit which falls within section 401 ITEPA 2003 may be excepted from a charge to income tax if the service of the employee or former employee included ‘foreign seafaring service’ comprising:

  • three-quarters or more of the whole period of service ending with the date of the termination in question, or
  • if the period of service ending with that date exceeded 10 years, the whole of the last 10 years, or
  • if the period of service ending with that date exceeded 20 years, one-half or more of that period, including any 10 of the last 20 years

‘Foreign seafaring service’ means service to which a), b), or c) below apply:

a) Service in or after the tax year 2003 to 2004 such that a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers’ earnings) (see EIM33000).

b) Service before the tax year 2003 to 2004 and after the tax year 1973 to 1974 such that a deduction equal to the whole amount of the emoluments from the employment was or would have been allowable under a seafarers’ earnings deduction provision.

c) Service before the tax year 1974 to 1975 in an employment as a seafarer such that tax was not chargeable in respect of the emoluments of the employment:

a. in the tax year 1956 to 1957 or later, under Case I of Schedule E, or

b. in earlier tax years, under Schedule E

or it would not have been so chargeable had there been any such emoluments (see EIM13705).

EIM33000 provides guidance on when deductions from seafarers’ earnings are allowable.

The meaning of ‘employment as a seafarer’ is given by section 384 ITEPA 2003 (see EIM33101).