Under What Flag Would You Register ?

[goboatingnow]

Wrapping a purely leisure vessel up in a uk company is generally a bad idea. It's almost impossible to do so without breaking tax or company law. A boat is a means of transport not like land or houses . Hence you have benefit in kind issues, ( losses through depreciation. , etc ) if you get around this by having any sort of commercial income, you have to have a MCA coded vessel. Then there's the issue of putting the boat into the company in the first place ( and getting it out) without incurring a requirement to VAT register and hence charge and account for VAT

these arrangements should only be entered after a full and complete walk through with a good uk tax accountant.

Note that part 1 registration confers proof of ownership. The SSR does not.

Dave

[Zonker]

Ok, looks like the taxation is an issue. Hm ... then back to an offshore company again. Guys - thanks a lot for your feedback.

[Zonker]

Funny ... Jersey and Guernsey registry require a very small amount of fee whereas the oversea colleagues in the carrebean charge a horrendous amount.

Question - can I use a BVI company to own the boat and use the Jersey or Guernsey ship registry ? As far as I understand BVI belongs to the UK overseas territory ?

[Zonker]

Belize seems the cheapest place :

Registration Fees :

Registration Fee US$100.00
Annual radio license fee US$ 50.00


Annual Taxes :

For yachts from 6 metres up to 15 metres in length: US$250.00
For yachts of 15 metres up to 25 metres in length: US$500.00


The registration requirements for Pleasure Crafts (Yachts) will remain the same. Detailed below are the safety requirements:

1. Tonnage Measurement Certificate (Simplified Method) to be issued by our Administration for a fee of US$100.00. This is a permanent certificate which will not require re-issuance.
2. Certificate of Compliance for Pleasure Craft with a 5 year validity and subject to an annual endorsement. The Owner may choose this to be issued by :

Our Administration itself by its own appointed surveyor(s) and endorsed annually subsequent to an inspection of the vessel for a fee of US$500 per annum

or
By one of our ROs at their current charge
or
in the event that a vessel is in a remote area where none of the above-mentioned options are available, by a surveyor of Owner?s choice whose competency qualifications etc., must be approved in advance by our Administration for this purpose only.




And it seems no company is required - but may be belizesailor can provide more information.

[savoir]

Originally Posted by Zonker

Funny ... Jersey and Guernsey registry require a very small amount of fee whereas the oversea colleagues in the carrebean charge a horrendous amount.

Question - can I use a BVI company to own the boat and use the Jersey or Guernsey ship registry ? As far as I understand BVI belongs to the UK overseas territory ?

You could use BVI, Gibraltar, Isle of Man, Bermuda, Cayman . . . .

[Dockhead]

Originally Posted by Zonker

Anyone considered to use an UK Ltd to register a boat ? I would assume that registration fees are much lower then some of the "flag of convenience" countries.

Question though is where is the company maintenance cheaper ?

That's how my boat is registered.

UK flag is excellent -- no taxes, dirt cheap insurance, extremely cheap company maintenance, EU membership (no customs clearances in the EU), no one will ever think your flag is dodgy or suspicious. Free radio station licensing, done in two minutes online through Ofcom.

Only downside is the boat needs to be VAT paid. If it is -- UK flag is as good as it gets.

[Dockhead]

Originally Posted by goboatingnow

Wrapping a purely leisure vessel up in a uk company is generally a bad idea. It's almost impossible to do so without breaking tax or company law. A boat is a means of transport not like land or houses . Hence you have benefit in kind issues, ( losses through depreciation. , etc ) if you get around this by having any sort of commercial income, you have to have a MCA coded vessel. Then there's the issue of putting the boat into the company in the first place ( and getting it out) without incurring a requirement to VAT register and hence charge and account for VAT

these arrangements should only be entered after a full and complete walk through with a good uk tax accountant.

Note that part 1 registration confers proof of ownership. The SSR does not.

Dave

I am confused by your statement "purely leisure vessel". Surely you mean the opposite? Maybe you meant "a vessel with more than just purely leisure activities?" If you have no charter income, if you don't try to claim depreciation (that is, if your UK company has no business activities), if you have no employees, then there is zero tax associated with a UK registered boat and no tax issues. You file to make the company dormant and you are not required to file any tax returns or accounts. Merely holding an asset is allowed for a dormant UK company.

But if your holding company has income, then it instantly becomes much more complicated -- you need to file accounts, charge VAT, etc., etc., etc., etc. -- like anywhere.

[Zonker]

Originally Posted by savoir

You could use BVI, Gibraltar, Isle of Man, Bermuda, Cayman . . . .

Got recently a quote for BVI ... $3000+ for registration and company formation, $1500 for yearly renewal and company maintenance.

With that price tag, I can do it "onshore" !

[David_Old_Jersey]

Originally Posted by Dockhead

I am confused by your statement "purely leisure vessel". Surely you mean the opposite? Maybe you meant "a vessel with more than just purely leisure activities?" If you have no charter income, if you don't try to claim depreciation (that is, if your UK company has no business activities), if you have no employees, then there is zero tax associated with a UK registered boat and no tax issues. You file to make the company dormant and you are not required to file any tax returns or accounts. Merely holding an asset is allowed for a dormant UK company.

But if your holding company has income, then it instantly becomes much more complicated -- you need to file accounts, charge VAT, etc., etc., etc., etc. -- like anywhere.

Just being (very!) nosey - I am guessing you don't put any of the expenses through the company - it litterally just owns the boat.

and being very very nosey! - how long have you been doing this?

Don't be shy about telling me to mind my own business!

[goboatingnow]

Originally Posted by Dockhead

I am confused by your statement "purely leisure vessel". Surely you mean the opposite? Maybe you meant "a vessel with more than just purely leisure activities?" If you have no charter income, if you don't try to claim depreciation (that is, if your UK company has no business activities), if you have no employees, then there is zero tax associated with a UK registered boat and no tax issues. You file to make the company dormant and you are not required to file any tax returns or accounts. Merely holding an asset is allowed for a dormant UK company.

But if your holding company has income, then it instantly becomes much more complicated -- you need to file accounts, charge VAT, etc., etc., etc., etc. -- like anywhere.

Firstly, if you are an employee or a director of the company. Any personal use results on a benefit -in -kind charge. ( and expensive too given the value of the yacht.

Secondly you have the issue of how the company acquires the yacht in the first place. If you lend it the money then it must register for vat as the purchase transaction will exceed the vat threshold and when it sells the yacht it must charge sales vat and account for it. ( and there is the issues of VAT " self supply here" )

Then capital deprecation causes continuous losses, or asset revaluing causes gains ( and taxs)

Not to mention paying for insurance ( that must be a transaction for the company as its the insured interest )

I've never seen it done yet legally , except where the fiction of chartering can be maintained and this generally only works for large vessels.

Dave

[Zonker]

Anyone knows if this is possible ?

-> Register BVI company owned boat in UK Part 1 registry.

Would make life in EU water very easy.

[savoir]

Only easy if the boat is VAT paid.

[micah719]

If your mate sells you your boat for €1, do you then owe VAT on €1?

[Zonker]

Originally Posted by savoir

Only easy if the boat is VAT paid.

Obviously VAT is paid - otherwise I wouldn't want to seek to register in UK. But as you have stated in another thread an address in UK is required which results in a UK branch.

Jersey has a similar setup - British oversea companies can register in Jersey registry. But the big difference is, that Jersey "provides" a list of representatives.

From a cost perspective it seems following setup is a very favorable one :

- company in BVI, Anguilla etc owns boat
- register in Jersey which is very cheap compared to the Caribbean ones

[savoir]

Why not register in UK even if VAT unpaid? It is cheap and simple. If the boat is not VAT paid then your only downside is the 18 month rule while in EU countries.

Some serious bargains can be had with buying tax unpaid boats in EU countries.