Income Tax (Earnings and Pensions) Act 2003 section 414C

Reduction in other cases of foreign service as seafarer

Section 414C provides a proportionate tax reduction on termination payments for seafarers with foreign service who do not qualify for the full exemption under section 414B.

• UK-resident seafarers who receive a termination payment and have some foreign seafaring service, but do not qualify for the full exemption, may claim a proportionate reduction in the taxable amount
• The reduction is calculated as the ratio of foreign seafaring service to total service in the employment before termination
• The relief applies to amounts that would otherwise be treated as earnings under the termination payment rules or count as employment income under the charge on termination payments
• The relief cannot reduce a person's income tax liability below any amount they are entitled to deduct, retain or charge against another person