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Old 11-02-2012, 18:25   #1
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Boat Regs ex UK or New Zealand

we are about to embark on a new adventure and would love some help on a few things and as seems always to be the case, we are getting some differing advice so have come to the experts !.


I, as the boat owner have a New Zealand and UK passport, my partner has NZ passport, currently acquiring an Irish one !
We pick up our new catamaran in la Rochelle in April and intend to sail for up to 6 months in the med.

1/Should we register the boat in UK or NZ?
2/IF NZ does this mean we have to go out of EU countries each year?
3/IF UK, do we have to pay VAT on the boat when we pick it up?
4/Is the NZ flag OK if UK registered?
BUT
from reading forums It seems that rego in one country and passports in another just creates problems?
Would love advice on this please,
ciao
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Old 11-02-2012, 18:39   #2
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Re: Boat rego ex UK or New Zealand

The registration of the boat has nothing to do with EU VAT. Its the status of the "beneficial" owners that matters. If its owner(s) are not EU tax residents then you do not have to pay VAT, and you will be entitled to temporary import relief, which will allow the boat remain in the EU for 18 months.

You cannot register your boat on the UK register unless you are established in the UK or EU. ( i.e. you have an address there).


The main problem in sailing in the EU with a foreign registered boat and EU passports is that it can attract attention and can seem to the authorities a tax dodge. You need to ensure you can sustain your foreign domicile claims.

On the other hand having a EU registration boat is that since no VAT is paid, if you are using your boat the TIR conditions could be breached if an official thinks you are EU resident, again proof of foreign domicile is useful.

If I was you I'd register it in NZ ( which is after all your home), then Id pull out the EU passport to ensure that you can get unlimited access to Eu countries. Just carry sufficient proof that your are domiciled outside the EU.

In practice you are supposed to fly the flag of the registration country in Practice almost nobody cares ( except the french!!),



Dave
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Old 11-02-2012, 18:56   #3
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Re: Boat rego ex UK or New Zealand

Thanks Dave,
we were ( are??) confused about having the boats rego status versus our Passports and the BOATS ability to winter over in a EU country for 4-5 months versus our personal ability to stay on our EU passports.?
that is can we leave it in France/Spain etc as EU passport holders or as a non EU rego boat does IT have to go out to Turkey etc?
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Old 11-02-2012, 19:06   #4
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Re: Boat rego ex UK or New Zealand

G'day, Mate. Welcome aboard. It is my understanding if you flag it N.Z. then should you ever sail it to N.Z. you are expected to make prompt 15% GST and 7.5% duty payment shortly after clearly customs here. The vessel is then subject to Category 1 certification should you wish to leave.

I have imported my Mason 53 to New Zealand, but maintains the U.S. flag and U.S. Coast Guard documentation. The vessel is not subject to Category 1 certification and she can be sold free of any taxes or duties. Cheers.
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Old 11-02-2012, 19:46   #5
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Re: Boat rego ex UK or New Zealand

Quote:
Originally Posted by Zee Kiwi View Post
Thanks Dave,
we were ( are??) confused about having the boats rego status versus our Passports and the BOATS ability to winter over in a EU country for 4-5 months versus our personal ability to stay on our EU passports.?
that is can we leave it in France/Spain etc as EU passport holders or as a non EU rego boat does IT have to go out to Turkey etc?

Again the flag state is irrelevant. If you the owners are not EU tax residents. Then the boat ( assuming the VAT was never paid) can remain in the EU for 18 months before VAT is due. You can reset the Vat clock by leaving the EU for one day. Its matter not what your passports are.

If you had a UK registered boat, again it depends on the VAT status, if Vat was never paid, then two scenarios apply (a) You are not resident in the EU and TIR applies (b) you are and VAT is immediately due.

Since your catamaran is new, I presume you are not paying VAT (why should you). Then I suggest NZ reg ( of course there is the NZ tax etc). you then get 18 months TIR.

As I said unless you are "established" in the UK you can't register it anyway. Secondly if its not in a company and owned by a person ( claiming Uk address) the UK register may seek to determine VAT status. it can get complicated.

As I said unless you can wrap up in a corporate entity or have a pausible UK address the UK registry is out anyway.

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Old 11-02-2012, 20:04   #6
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In case I'm being dense here

The best bet is NZ registration. That way you get 18 months vat free presence in the EU for the boat, and it can be easily reset.

Then use your EU passports when checking in at marinas. This avoids being subject to non EU immigration and customs rules.

You get to travel around the EU with no personal time constraints and no immigration or check in hassle yet the boat remains VAT free. Just retain proof of foreign domicile ( tax returns, household bills etc) in case of a VAT inspection. However VAT inspections almost never ever happen anyway.

Dave
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Old 11-02-2012, 20:07   #7
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Re: Boat rego ex UK or New Zealand

Dave's advice is entirley correct. There is no magic about it , register it in NZ and then by complying with EU regulations you mat remain VAT exempt. When you return to NZ, if that is your country of domicile , you pay duty and GST on the purchase price depreciated by 10% per annum.
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Old 12-02-2012, 05:46   #8
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Re: Boat rego ex UK or New Zealand

Quote:
Originally Posted by goboatingnow View Post
In case I'm being dense here

The best bet is NZ registration. That way you get 18 months vat free presence in the EU for the boat, and it can be easily reset.

Then use your EU passports when checking in at marinas. This avoids being subject to non EU immigration and customs rules.

You get to travel around the EU with no personal time constraints and no immigration or check in hassle yet the boat remains VAT free. Just retain proof of foreign domicile ( tax returns, household bills etc) in case of a VAT inspection. However VAT inspections almost never ever happen anyway.

Dave
+1

I would also add that if you go UK registration (in personal name) that you will in effect be claiming that you are UK (EU) resident whilst also claiming the exact opposite! (not to say that isn't possible to do - but confuses the story. IMO the KISS approach when it comes to dealing with officialdom is always good - yer don't want 'em to have to think too much ).

Once the boat leaves EU waters (never to return?) you can of course change the Registration from NZ to the UK (if you can "magic up" a UK address)....if that later helps (for only "visiting" NZ?). Obviously a cost and aggro involved to that.
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Old 12-02-2012, 13:02   #9
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Re: Boat rego ex UK or New Zealand

A good detailed but possibly dated summary is at http://www.svsarah.com/Whoosh/WhooshCruiseVAT.htm
For the references to the detailed rules see http://ec.europa.eu/taxation_customs/customs/procedural_aspects/imports/temporary_importation/article_994_en.htm
Note the disclaimer.

It is not clear from the original questions whether the owner is an established resident in the EEC, nor if he plans to return to NZ and in what time frame. Leaving the boat in Turkey sounds like continued residence in say the UK.

Liability for VAT depends on official residence. That would be a matter of fact determined by officials.

Assuming EEC residence is temporary and one has ongoing residence in NZ shown eg by retaining property. Then one can get an 18mth exemption from VAT. I doubt that this can be regranted simply by leaving for a day. The actual time is not specified. Incidentally I think Turkey has just changed its rules to allow 3 months in any year cutting down the overwintering period though the specifics are just from memory.

If you return to NZ duty and GST are payable if you are importing rather than transiting. Hopefully you could reclaim VAT but it would pay to check on that with an expert. It may be that while vat is not payable on exports there is a time limit on refunds.

NZ may suspend tax on a resident if they intend leaving again within a limited time, but this is not repeatable as a way of evading tax. An overseas boat can be temporarily imported without tax I think for 6-12 months but is subject to tax on sale.

I don’t know the basis for the claim that it is not. Firstly USA registration does not roll over as the new owner must be a US citizen. If temporarily exempt from tax the only way I see of avoiding tax on resale is if the sale takes place out of NZ say in Fiji, which is cumbersome but possible. One would want the money in escrow before doing a delivery.

In some countries there is a tax exemption on household property of immigrants. I don’t think that applies to boats in NZ but have a vague memory that in one case the boat was defined as their home and not taxed however I would not rely on that kind of individual interpretation.

So the answers appear to be 1 Register where you are resident or will mainly be living. Sure you can register under a flag of convenience if you do not plan to be primarily resident in some country while keeping the boat.
2 Every 18 months for an indefinite period.
3. Yes.
Four, You normally fly the flag of registration. My recollection is that it is an offence to fly an incorrect flag. The boat has to be registered somewhere which is different from paying tax on it. It can be NZ registered some time before tax becomes payable. I don’t know the criteria for UK registration namely whether it is citizenship or what. This may be a complication if the boat is jointly owned and only one of you has UK citizenship. On looking it up it looks like you would be eligible under Part 3 if you are resident for 185 days a year. You would be eligible under Part 1 but it looks like your wife would not. Part 1 allows loans to be registered against the boat title. See http://www.direct.gov.uk/en/TravelAndTransport/Boatingandtravellingbywater/PleasureCraft/DG_180594
As always it is a specialized area and lay advice may or may not be accurate.
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Old 12-02-2012, 14:17   #10
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Re: Boat rego ex UK or New Zealand

Hi there,

We are in a similar, although not identical situation. I and my husband share ownership of our boat and I have an NZ passport and he has a UK one. We are currently en route to NZ in our boat, intending to emigrate. EU VAT is not relevant as our boat was built a LONG time ago so I can't comment on the EU VAT rules for new boats, but some things we have found out along the way that may be helpful:
  1. As a non-UK citizen, I cannot officially own any more than 31/64 shares of a UK registered boat. Go figure. I can own a house in the UK, I can vote in their elections, I can even join the British Army, but I can't own half a boat. Only nearly half.
  2. So far, on our travels down Europe over the last many months, being on an NZ passport has not been an issue at all, and there have been no restrictions on how long I can stay anywhere. The only issue I may have had is working in Europe had I wanted to. I do know there are some tax laws in Spain (and perhaps other EU countries) that mean you can only have your boat there for 180 days per year (regardless of whether or not you are on it) before being classed as resident for local tax purposes, but I don't have masses of detail on this as it won't affect us.
  3. We are emigrating to NZ with the boat, and have no intention of sailing her back again, so we will not be transitting and we will be "importing" her. Before we embarked on this mad plan, I checked with NZ Customs and Immigration and found out that if we met certain conditions we would be exempt from all GST and Import Duty on the boat. Basically it is classed as a personal possession. Those conditions are:
    • You must have owned the boat for at least 1 year before departing. You should fit this criteria if it takes you a few years to get to NZ.
    • You must be a returning citizen (which if you are on NZ passports you will be).
    • You must arrive on the boat (i.e. you can't fly in and get it shipped or delivered by someone else). In our case, it also has to be the point at which my husband validates his residents visa - i.e. he can't fly in for a trip and validate that prior to arriving on the boat. If he wants to go there before we finally arrive then he has to do it on a tourist visa. No great shakes.
    • You must not use it for commercial purposes after arrival for 2 years
    • You must retain it for at least 2 years after arrival.
    These may seem onerous to some, but for us it's not a problem, the boat is a family heirloom now so we have no intention of letting someone else get it there for us or selling it afterwards. But if you're trying to avoid GST and your boat is worth a bob or two, thems the rules.

Hope this helps.
Vicki
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Old 12-02-2012, 15:15   #11
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Just to reiterate as some mis information is creeping in

I am assuming you are not EU tax residents. If that is so you will buy the boat vat free. ( there can be issues here) you can avail of 18 month import relief before vat is due and you can reset the vat clock by taking the boat out of the EU for 24 hours.

If you are a eu resident then vat must be paid on the purchase at the time of the purchase. If you export the boat within 90 days vat refund can be sought. However this requires you to show a valid import in a country outside the EU. After 90 days vat cannot be reclaimed
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Old 12-02-2012, 22:46   #12
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Re: Boat rego ex UK or New Zealand

I don't see any reason to make an assumption. What specific misinformation are you claiming and on what basis?
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Old 12-02-2012, 23:14   #13
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Re: Boat rego ex UK or New Zealand

"I don’t know the basis for the claim that it is not. Firstly USA registration does not roll over as the new owner must be a US citizen. If temporarily exempt from tax the only way I see of avoiding tax on resale is if the sale takes place out of NZ say in Fiji, which is cumbersome but possible. One would want the money in escrow before doing a delivery"

G'day, Chris. There is a huge difference between temporary and permanent import status. In my case, I was referring to permanent. Anyone, doesn't matter where you are a citizen of, is able to buy my permanently imported to N.Z. boat free of any taxes. No offshore deliveries needed. They are also able to flag and register it based on their nationality, with the exception of coarse, of a N.Z. citizen.

The new owner of the N.Z. permanent imported vessel is able to enter & leave N.Z. whenever and leave it as long as they want (with the proper visas if they are not a N.Z. resident or citizen). Sorry for any confusion. Cheers.
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Old 14-02-2012, 16:43   #14
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Re: Boat Regs ex UK or New Zealand

Hi all,
and thank you for your input- much valued.We dont ever intend to bring the boat back to NZ- we will be too old by the time we finish in the Med.

I think the only thing we now do NOT have clear is-( and I only ask this as we have been given differing information from other Kiwi sailors)

is- can we winter the boat over in a EU port ?

based on-
1/ having EU passports

or
2/NOT being able to - as the boat is non EU registered ?

cheers
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Old 14-02-2012, 18:50   #15
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Re: Boat Regs ex UK or New Zealand

Zee Kiwi,

OK again here goes

(a) The boats ability to stay the EU is a function of Vat or not VAT paid, If its not VAT paid then (a) if you are not a EU tax resident then YES it can stay for 18 months continuous , (b) if you are a tax resident then it can stay for ever BUT you must pay the VAT.

Its got NOTHING to do with the flag registration, VAT laws for leisure goods , simply have no idea about flag states.

I think 18 months will cover most winters here ( just about not sure about Ireland, in my opinion there summer occurs on 8 july and thats it), the 18 month can be reset by the boat spending a day out of the EU customs terrority.


where the confusion applies is YOU can't, short of using national visa schemes and some particular generous national schemes available to NZ residents, stay in the EU for more then 90 days out of 180. so the boat can stay much longer then you can,

In this case however as holders of EU passports, you can stay as long as you like.

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