Aussie flagged, buying in Panama, Brit purchaser...

[settlednomad]

Hi Forum,

The net has tightened on our perfect (to us) boat. We plan to fly to Panama next month to view and hopefully purchase. The question isn't about the boat, per se, more the process and pitfalls of the deal. It all seems a little complicated on paper!

The boat is Australian flagged, it is currently (will be sold in) Panama, I am British and will register it on the UK SSR. What should I be aware of with regards any taxes to be paid in that country and subsequent VAT implications when I eventually return to the UK? I will be buying through the broker. The boat is a Moody which I assume was built/registered/VAT paid back in 1991. Does this exempt me from VAT when returning in say 5 years time? I have read that there are certain conditions where they'll waive the charge. It all seems a bit grey...

[Captsteve53]

Buying In Panama shouldn't present any issues but would just check how long she has been in their water re local taxes or regulations(like was she chartering there or run as a business?).

Changing to the British SSR would require proof of British current resident, bill of sale and deletion papers from the Australian registry, if not a current British resident the the vessel can still be registered as British Flag but would need to registered as a ship(possible with no issues but requires further input re the vessel/documents and costs way more,

Taxes and duty back in the UK go on age of vessel and where built so if built in England (and proof of such as hull numbers) then there should be nothing to pay as it would a returning vessel,


Cheers Steve

[boatman61]

For SSR its pretty straight forward.. just fill in rhe online form and pày by card..
Regarding VAT.. you will be liable on return.. if we are still in the EU.. if not.. who knows in 5years what the taxes will be.
Currently I believe 2years is the maximum one can be outside EU waters before becoming liable.

[settlednomad]

CaptSteve53 & Boatman61 - thanks a lot for this. Based on age, size of boat and value (purchase or market estimated), is there a formula for working this out? Maybe I am worrying too much and the sums won't be too great. But what I don't want to do is sail off into the sunset and have many glorious years only to return to the UK and a hefty VAT bill - I will need to keep something in reserve!

If it helps, the basics are these: boat age 1991, value £70k, length 13m. I realise that the UK is in a state of flux at the moment and the future is largely unknown. But if I were to return the boat this year, for example, what would be a likely ball park figure for VAT.

I am Brit resident so SSR shouldn't be too much of an issue.

Aussie deregistering - a lengthy process??

[nauticalnomad]

Boatman61..
Phil.. That 2 year VAT rule.
Do you reckon that applies to Pre VAT boats as well?
If my 1968 year build yacht is out for over 2 years then comes back does that mean its liable for VAT?

Also.
The Australian De registering if its state registered is easy enough. You just have to post the form back saying its sold much like a car. I am only speaking of QLD registration cause thats what i did. But i doubt the state reg is current on it anyways. The AMSA however which is somewhat an Australian SSR you can read the steps to dereg it here..

https://www.amsa.gov.au/vessels/ship...tion/index.asp

[Captsteve53]

As stated de registration is usually as simple as filling in the form and waiting for the release from Flag.

What with Brexit and all who knows where it will go, at the moment boats prior to 1985 were exempt, with other proviso's , the current VAT seems to be max 20% again with proviso's, , Here is a good link that explains reasonably well.

Value Added Tax and Yachts: An Overview « www.yachtworld.com www.yachtworld.com

Cheers Steve

[settlednomad]

Thanks, guys.

I guess whatever the case, I need not concern myself about the boat's current VAt-paid status. It seems it has been outside of the EU for a long time - I will have bought the boat outside of the EU - I will be a different owner on return to the UK. Therefore I don't seem to meet any one of the criteria for VAT wavering!! I guess the only thing to try to understand is roughly how much I can expect to pay on return using today's position within the EU.

There are some other interesting articles about being outside of the UK for more than 6 months, but a lot longer if possible (I plan to stay away for 5 years or more), you can bring it back under a nonresident/ex-pat import 'household belongings' - apparently these are tax-free. Further research required!

[boatman61]

Originally Posted by nauticalnomad

Boatman61..
Phil.. That 2 year VAT rule.
Do you reckon that applies to Pre VAT boats as well?
If my 1968 year build yacht is out for over 2 years then comes back does that mean its liable for VAT?

Also.
The Australian De registering if its state registered is easy enough. You just have to post the form back saying its sold much like a car. I am only speaking of QLD registration cause thats what i did. But i doubt the state reg is current on it anyways. The AMSA however which is somewhat an Australian SSR you can read the steps to dereg it here..

https://www.amsa.gov.au/vessels/ship...tion/index.asp

It would I think depend on country of manufacture.. if Euro/Brit likely no VAT.
If USA.. likely

[boatman61]

Originally Posted by boatman61

It would I think depend on country of manufacture.. if Euro/Brit likely no VAT.
If USA.. likely

One other thing.. the rules say that the boat becomes liable for VAT at the first EU port which is, if crossing the Atlantic.. usually Horta in the Azores.. sorting the VAT there can save you a few hundred quid.
There are those who'll say this is not a valid way but.. I did my Beneteau 331 there back in '07 and had no problems whatsoever.

[svfraidknot]

while in panama look me up , have friends here can help with panamanain paperwork ,, my address is here svfraidknot@yahoo.com my solaris 42 is moored in bay of panama at amador good luck

[jmschmidt]

VAT, the scourge of the EU, I don't know about that and don't want to know about that. But Panama should have nothing to do with the sale assuming money will not be run through a Panama bank. Try to avoid that. Put up a documentary letter of credit (LC) if possible with a UK or Australian bank. Well worth the cost.

Check with Australian authorities and find out what docs they require to transfer title and deflag.

Check with Brit authorities and find out what docs they require to transfer title and reflag.

Get a signed builder's certificate if possible.

Keep an eye on the broker, these guys like to cut corners on paperwork.

The good news...everyone speaks English, even most Panamanians.

[settlednomad]

Jmschmidt - brilliant, thank you.

SV Fraidknot - absolutely will...

[Uncle G]

"I am British and will register it on the UK SSR. "

"There are some other interesting articles about being outside of the UK for more than 6 months, but a lot longer if possible (I plan to stay away for 5 years or more)"

If you intend being away that long, then you aren't really meant to use the SSR:

"you must live in the UK for at least 185 days of the year"

https://www.gov.uk/register-a-boat/the-uk-ship-register

[kryg]

You guys are looking at this the wrong way, why go back the UK? Live where there is great sailing year round, (Mostly) Migrate to Australia.
Forget the VAT. the GST is paid and as the boat is an Australian boat it would be ship regirested. No duty and sunny skys no Brexit issues.

[settlednomad]

Uncle G - I never realised this! So I guess Part 1 would be the official way to do this? I hope to god there aren't any naughty people out there fulfilling long-term sailing dreams and circumnavigations on SSR boats - the utter shame of it all 😂

Kryg - You may have a point! If it weren't for the stringent rules and my age now working against me - 48 - I'd give it careful consideration...