Not For Sale to US

[eyschulman]

What does it mean when a boat sales flyer has the statement "not for sale ro US resident in US waters"?

[sarafina]

Tax issues. Typically registered in the Caymens or some other tax shelter isle...

[maxingout]

If they don't put that disclaimer on the yacht, they will have to pay custom duties on the yacht. A US citizen can purchase the yacht. Simply sail offshore or go to the Bahamas to do the deal.

Take a Camera, a GPS, a Newspaper, and a notary and sell the yacht to an American offshore. The newspaper shows the day the deal was done, and the camera documents the GPS location.

[eyschulman]

Does that make a problem for the buyer who brings the boat to US to document and set up home port?

[forsailbyowner]

I'd have to wonder about a standing lien.

[imagine2frolic]

Many times when a boat is bought out of the country. There is a time limit before it can be brought into the USA, OR THERE ARE TAXES DUE! There are legal ways to avoid the taxes, but they vary from jurisdiction to jurisdiction.........i2f

[osirissail]

Hundreds of boats are purchased by US citizens from places outside the USA and brought into the USA. Documentation is not a problem if you have a bill of sale that has been "apostilled."
- - The strange requirements stated raises many "red flags" from being a stolen boat to tax problems to drug/watch boat to hidden problems in the boat which under US law would have to be revealed and taken care of. There are just too many possible reasons the boat be a problem to you once you get back into the USA waters. One of the biggies is "clear title." More than a few island countries do not have a way to legally to transfer an abandoned boat to a new owner that will be recognized by the USA or other major country. So the boat stays in the waters of the island or chain of islands.

[AnchorageGuy]

If you are truly interested in this boat then you need to ask the seller or broker WHY. If the answer is vague or unclear, you might want to just forget it. If the answer sounds logical, you might want to investigate further that it is fact. But with all of the boats available for sale in the US you should be able to find something with less hassles regardless of the price. WG

[Randyonr3]

Theres a chance that it might be a liability issue with the boat.. I was in Germany a couple years ago to an equeptment show.. Many of the vendors would NOT sell to a US company due to the liability involved..

[Bash]

It's about taxes, not liability. Many megayachts are structured as businesses owned by offshore companies. You set an outrageous price to charter your yacht, and then take a loss when no one charters it. The catch is that you cannot take a loss too many years consecutively before the business is seen to be a hobby, at least for tax purposes. This rule changes, however. once the business is put up for sale. This is why half the megayachts listed for sale are not considered "seriously for sale." But what happens when you bring a foreign flagged yacht into US waters? Well, if it's for sale by a business, it's suddenly considered to be merchandise, which is as taxable as any other business inventory. The way to beat this is to list the boat/business as "not for sale to US residents in US waters."

So what you've got is a foreign-flagged meagayacht owned by an offshore corporation (which is, in turn, owned by a US citizen) that enters into a charter business at such highly inflated prices that no sensible person will charter the boat, which generates a business loss that results in a tax break that helps pay for the yacht, but after a few years the only way to maintain deductible losses is to put the boat up for sale, which is done at such an inflated price that no one would actually buy it, but if you want to sail it to Miami you've got to stipulate that it's not for sale to US residents in US waters so as to avoid inventory taxes on your business.

Slick?

[jkleins]

Originally Posted by Bash

It's about taxes, not liability. Many megayachts are structured as businesses owned by offshore companies. You set an outrageous price to charter your yacht, and then take a loss when no one charters it. The catch is that you cannot take a loss too many years consecutively before the business is seen to be a hobby, at least for tax purposes. This rule changes, however. once the business is put up for sale. This is why half the megayachts listed for sale are not considered "seriously for sale." But what happens when you bring a foreign flagged yacht into US waters? Well, if it's for sale by a business, it's suddenly considered to be merchandise, which is as taxable as any other business inventory. The way to beat this is to list the boat/business as "not for sale to US residents in US waters."

So what you've got is a foreign-flagged meagayacht owned by an offshore corporation (which is, in turn, owned by a US citizen) that enters into a charter business at such highly inflated prices that no sensible person will charter the boat, which generates a business loss that results in a tax break that helps pay for the yacht, but after a few years the only way to maintain deductible losses is to put the boat up for sale, which is done at such an inflated price that no one would actually buy it, but if you want to sail it to Miami you've got to stipulate that it's not for sale to US residents in US waters so as to avoid inventory taxes on your business.

Slick?

That makes so much sense. I picked up some "Super Yachts" magazine at an airport lounge last week and was amazed that these yachts all had glossy ads for charter at $300,000-500,000 per week which seemed incredibly high to me and then in the brokerage listings all the boats I just saw for charter were also for sale. I just thought everybody was going broke but this makes much more sense.

Jim

[Dedzaboy]

As it was explained to me when I asked the very same question of a broker, when a foreign flagged yacht (any yacht or boat, not just a corporate-owned yacht) enters the US you are provided with a "cruising permit" enabling you to cruise the US. If, however, the owner then advertises the boat for sale then the cruising permit is revoked, you can't use the boat, and import duty of 2% of the surveyed value is immediately payable. If the sale is completed then there may be state taxes to pay as well. It was enough to put me off trying to sell my boat in US waters...Doubtless there are ways round this issue?

[eyschulman]

Thganks to all for enlightenment. Ed.

[KestrelBuck]

The boat that is listed as 'not for sale to US resident' can only be shown to a prospective buyer as 'an example of what may be available.' A foreign flagged boat may be brought to US waters for no other reason than to make it accessible to a larger market. The reason for it being in US waters need not be sinister.