Armed Forces Savings

Armed Forces Savings This page is for members of the armed forces and their spouses and civil partners. It tells you more about your residence status, and how serving overseas can affect your savings in the UK. Residence Status Members of the Armed Forces are classed as Crown Servants. Being a Crown Servant does not prevent you from being treated as not resident and not ordinarily resident in the UK for UK tax purposes when you are posted abroad. The same residency rules that apply to everyone else in the UK apply to Crown Servants and also their spouses. For more information about Crown Servants please click on this link [http://www.hmrc.gov.uk/cnr/crown_employees.htm]. Individual Savings Accounts (ISAs) To be eligible to subscribe to an ISA an investor must normally be resident and ordinarily resident in the UK. But there are different rules for Crown Servants. Crown Servants, and their spouses or civil partners, can subscribe to an ISA while serving overseas. So, if you, your spouse or civil partner, already has an ISA you can continue subscribing up to the normal limits while you are posted abroad. And if you wish to open an ISA while you are serving overseas you can do so. You are required to enter your permanent residential address on an ISA application form - a BFPO address is acceptable for this purpose. Some managers may refuse to accept applications from Crown Servants serving overseas. If they do, that is their commercial decision. There is nothing in the ISA rules that prevents a Crown Servant serving overseas opening or subscribing to an ISA. Child Trust Fund (CTF) Your child is eligible for a Child Trust Fund (CTF) account as long as: • • • • •

your child was born on or after 1 September 2002 your child lives in the UK you receive Child Benefit for your child and your child is not subject to immigration control. Children of Crown Servants posted overseas qualify because they are treated as being in the UK.

A CTF voucher is issued automatically when you claim Child Benefit. A maximum of £1,200 in any year (between the child's birthdays) can be saved in the account by parents, family or friends. This is not affected by any period you are posted abroad.

Bank and building society interest Before you can decide how your interest should be paid you need to know whether you are liable to tax and whether you are resident or not ordinarily resident in the UK. You can find if you are resident or not ordinarily resident in the UK by reading booklet IR20 ‘Residents and non-residents’ [link to web version]. Unlike ISAs, there are no special rules for Crown Servants. A saver who is resident in the UK and who is not liable to pay tax can complete a form R85 to get their interest paid without tax taken off. For more information about form R85 click here [http://www.hmrc.gov.uk/taxback/]. The completed form R85 is given to the relevant bank or building society. And a saver who is not ordinarily resident in the UK can complete a form R105 to get their interest paid without tax taken off. Again, the completed form should be given to the relevant bank or building society. Not all banks or building societies accept form R105. In all other cases your bank or building society will deduct income tax at the lower rate of 20% from your interest before paying it. But if you are not liable to pay income tax you may be able to claim the tax back from HM Revenue & Customs. To find out whether you can do this contact the Centre for Non-residents. Their telephone number is 08450 700 040 if calling from the UK, or + 44 151 210 2222 if calling from outside the UK You are required to enter you permanent residential address on forms R85 and R105. BFPO addresses are acceptable on both forms.