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Old 06-02-2012, 08:45   #16
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Re: French tax shelter program (called "Defiscalisation")

I would have to second Palarran, post #8 - - common sense says if you give somebody money in anticipation of buying something and getting delivery later (exactly what department stores in the USA do with holiday "law-aways") you do not own anything but a receipt for your "deposit."

The boat was and is still owned by the company up until you take possession of the clear Title/certificate of ownership. So what are your saving? You don't own anything.

When you do take ownership (possession of a clear title) then and only then you have "purchased" the boat. But now the boat is a "used boat" so the taxes, whatever the local laws require, may be less than on a "new purchase."

Looking at it another way, you seem to be suggesting that between the start of the "deal" and your taking ownership, you are "renting/leasing " the boat when you use it. And over the interim years your rent is being "applied" as credit to the "new boat cost" and at the end of the agreement you end up buying a "used" boat.

This appears to be identical to the world's airline companies use of what is called "lease-back." The airline company buys a new airliner, sells it (or an older paid-off aircraft that they already own) to a aircraft leasing company, and then rents it back on lease. The corporation's "lease payments" are deductible whereas outright purchases are treated less advantageously tax-wise.
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Old 06-02-2012, 10:06   #17
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Re: French tax shelter program (called "Defiscalisation")

I don't know the ins and outs of how this deal works - but it has been going for donkey's years and is 100% legit. Simply a way of the French ensuring they have a recreational boat building industry, without having to pay subsidies.

Having said that, doesn't mean that everyone offering this deal is guaranteed to be 100% kosher. The usual caution should be applied when parting with large wads of cash.

FWIW Lease back / Hire Purchase arrangements do vary internationally - I recall being very surprised (many years back) that the Italians bought there houses using what was (to me) the same as a HP agreement rather than a mortgage - with ownership only passing over once the last 1 was paid (apparently their was a tax advantage to that arrangement - and it was normal for everyone, not just the "clever" people)......must have worked ok, the firm had a billion dollars worth of 'em .....no idea if that still happens in Italy.

In the UK I believe (aka not 100% sure!) that under a HP arrangement that ownership does not pass to the buyer until the last 1 is paid, but that after 50% (?) is paid the item cannot be simply repossessed.

My bet is that there are a lot more variations on the theme around the world - all of which are perfectly "Normal", depending on where you are / what you are used to......the danger is in assuming too much (easy to do for all of us!).
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Old 06-02-2012, 13:07   #18
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Re: French tax shelter program (called "Defiscalisation")

Going to the French version of Wikipedia - the OP's "Defiscalisation" translates to "Lease-back." A very common and useful process as I described for both avoiding taxes related to ownership such as - "wealth/property" taxes, in that you don't "own" the item but instead rent/lease the use of it.

And if your taxing authorities in your country allow tax deductions for "renting/leasing" that also adds that benefit to the one I mentioned above. But normally, in the USA tax code anyway, the cost of renting/leasing is only deductible against profits made in a business. In other words the cost of "leasing/renting" is a business related deduction and of no value to non-business operations/purposes.

So as an individual unless you are subject to property/wealth taxation and/or operate the boat as a business entity - Defiscalisation (i.e., Lease-back) is of no obvious value.
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Old 06-02-2012, 17:05   #19
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Originally Posted by YesIsail

What do you mean "we wont hurt each other" what can the buyer do in case the other part resells the boat or goes bankrupt while in that period.
Well for a 50% payment you physically have the boat
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Old 06-02-2012, 17:53   #20
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Re: French tax shelter program (called "Defiscalisation")

"what can the buyer do in case the other part resells the boat or goes bankrupt while in that period. "
If you aren't willing to get that kind of legal advice, specific to your location, from an attorney, who should also be reviewing or writing the contract for you, then don't worry about it. Either you'll get lucky or get robbed.

If you live someplace where there is personal property tax or inventory tax charged anually, then it can be very advantageous to not "own" something until it has been devalued by years of use. If you aren't aware of financial manuevers like this...you need to speak to a tax accountant as well as an attorney. Or do the work the hard way, using references, and hope you don't miss anything.

There's a reason that so many people pay professionals to get professional advice in these areas.
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