Boats with unpaid taxes

[Bluewaters2812]

My wife and I have started our investigations/searches into suitable yachts for us to live-aboard and cruise the Caribbean. Excuse my ignorance but could someone enlighten me on what the implications are for us as a buyer of a yacht that has not had the tax paid? It seems that many of the ads are silent on whether tax has been paid or not and yet others specifically state that tax has not been paid?

[Greenhand]

Originally Posted by Bluewaters2812

My wife and I have started our investigations/searches into suitable yachts for us to live-aboard and cruise the Caribbean. Excuse my ignorance but could someone enlighten me on what the implications are for us as a buyer of a yacht that has not had the tax paid? It seems that many of the ads are silent on whether tax has been paid or not and yet others specifically state that tax has not been paid?

Are you referring to VAT?

[Bluewaters2812]

I guess in the USA it is referred to as sales tax or something similar and in the EU/UK it is referred to as VAT?

[KDH]

In the US it would be sales tax. However, as a UK resident it would be VAT. If you as a UK resident purchased a boat in the US and then wanted to bring it back to the EU, you would be liable for the VAT. EU residents are explicitly not allowed the use of a boat, within the EU, on which VAT has not been paid. I am a permanent resident of Canada, but as a US citizen, my boat is documented in the US, with the appropriate taxes paid. However, if I wanted to take my boat to Canada, I would have to pay the HST (harmonized sales tax of 23% on boats, essentially duty) in order to have my boat legal for use in Canadian waters. I suggest that you go to Noonsite and review their VAT info pages.

[KDH]

If you are looking to by a boat solely for use in the Caribbean, you as a UK citizen, may be able to flag the vessel in one of the Caribbean countries more cheaply than returning the boat to the UK to register it.

[Bluewaters2812]

Originally Posted by KDH

In the US it would be sales tax. However, as a UK resident it would be VAT. If you as a UK resident purchased a boat in the US and then wanted to bring it back to the EU, you would be liable for the VAT. EU residents are explicitly not allowed the use of a boat, within the EU, on which VAT has not been paid. I am a permanent resident of Canada, but as a US citizen, my boat is documented in the US, with the appropriate taxes paid. However, if I wanted to take my boat to Canada, I would have to pay the HST (harmonized sales tax of 23% on boats, essentially duty) in order to have my boat legal for use in Canadian waters. I suggest that you go to Noonsite and review their VAT info pages.

I know that I am liable for sales tax in certain US states if I don't remove the boat from their waters within 90 days (Florida) and then don't return within 6 months. As a non-US resident I am tax exempt under those conditions. I also know that I will only be able to cruise the Med/EU/UK for 18 months with a US registered vessel before I become liable for VAT and surveys etc etc.

What I was really wondering is whether I would be liable for any "back taxes" that a previous owner has owed on the boat in any particular country or US State. ie: If say Florida was looking for the owner of a boat and the boat itself because they are owed tax, will they have the power to seize the boat from me if I enter their waters and then retain possession until someone (either me or the previous owner) pays the arrear taxes?

[Bluewaters2812]

Originally Posted by KDH

If you are looking to by a boat solely for use in the Caribbean, you as a UK citizen, may be able to flag the vessel in one of the Caribbean countries more cheaply than returning the boat to the UK to register it.

I think you are correct there. My thoughts are to state register in either Rhode Island, USA or register the boat in BVI, as neither of them have any taxes. If I do the latter I just wonder what the practicalities are. ie: Do I have to physically travel to Rhode Island or BVI to do the registration (leaving the yacht for the time being wherever I buy it)? Or can I do the registration online or by post? I believe it is an offence to sail the boat unregistered.

I could of course buy the boat in say Florida, state register it there and leave for the Caribbean within 90 days and then eventually re-register the boat in the BVI.

Any thoughts on what I have said folks?

[justwaiting]

Originally Posted by Bluewaters2812

I think you are correct there. My thoughts are to state register in either Rhode Island, USA or register the boat in BVI, as neither of them have any taxes. If I do the latter I just wonder what the practicalities are. ie: Do I have to physically travel to Rhode Island or BVI to do the registration (leaving the yacht for the time being wherever I buy it)? Or can I do the registration online or by post? I believe it is an offence to sail the boat unregistered.

I could of course buy the boat in say Florida, state register it there and leave for the Caribbean within 90 days and then eventually re-register the boat in the BVI.

Any thoughts on what I have said folks?

More a question than anything else - do you have to take the boat to the UK to register it with a UK flag. I did not thing that you had to.

If you register the boat in Florida woudnt you be libable to pay sales tax there?

So why wouldnt you register with a UK registeration but keep it out of the EU to avoid VAT?

[Carlisle Spirit]

You do not need to take your boat to the UK to register it there

I recently registered my boat in UK while it was in a Singapore marina

Just google the uk registry to get the number and call them. They are incredibly helpful

Carlisle Spirit

[CSY Man]

A lien search would show any taxes due, but the annual taxation, say in Florida ain't all that much, $110.00 per year or so.

There could also been a mechanic's lien on the boat.

More on liens in the US:

Maritime Boat Lien Information - MarineTitle.com

[Carlisle Spirit]

+44 29 2044 8866

[Bluewaters2812]

Originally Posted by justwaiting

More a question than anything else - do you have to take the boat to the UK to register it with a UK flag. I did not thing that you had to.

If you register the boat in Florida woudnt you be libable to pay sales tax there?

So why wouldnt you register with a UK registeration but keep it out of the EU to avoid VAT?

I would be exempt from paying tax in Florida, as long as I sailed out of their waters within 90 days and did not return within 6 months.

I am not sure what the fees would be to simply register the boat in the UK but I do know that if I tried to bring the boat to the UK or any EU destination for any longer than a cruise period of 18 months, I would be liable for the applicable VAT (Currently 20% in the UK).

Plus I understand that there are exorbitant costs involved with compulsory "surveys" etc and then complying with some of the ridiculous "health & safety" and related regulations. For me, it is simply out of the question to consider importing a boat to the UK or EU because of the onerousness of the regulations and the exorbitant costs.

I do believe that for me as a "foreigner", it is simplest to State register the boat in a USA State (RI probably a good bet), and then sail to the Caribbean within 90 days because I will only arrive in the USA on the ESTA visa waiver system, which only allows me a stay of 90 days anyway.

[Bluewaters2812]

My question remains though: Can a USA state that is owed taxes on a particular yacht, seize the yacht from me as the new owner and hold possession until either the previous owner or I paid the arrear taxes?

[David_Old_Jersey]

Originally Posted by Bluewaters2812

My question remains though: Can a USA state that is owed taxes on a particular yacht, seize the yacht from me as the new owner and hold possession until either the previous owner or I paid the arrear taxes?

The answer to that is I don't know . But as far as I can tell that only a potential issue if you are buying a boat based in the USA. If she is in the Carribean then IMO has SFA all to do with the USA, whether registered there by the Vendor or not.

I am not sure of your residency, but if in the UK - then boat registration does not get any easier or cheaper than SSR. The only requirement is the owner being UK resident (any nationality - and boat can be anywhere, and with SSR no tonnage survey........hell, you could register a Lawnmower on the SSR and then try sailing her legally to the Southpole!).

[Pete7]

Originally Posted by Bluewaters2812

I am not sure what the fees would be to simply register the boat in the UK but I do know that if I tried to bring the boat to the UK or any EU destination for any longer than a cruise period of 18 months, I would be liable for the applicable VAT (Currently 20% in the UK).

Sadly it's more than that. Import duty plus VAT on the import duty plus cost of transporting it from say the US, plus VAT on the cost of transport to the UK. Then you need to have the thing pass CE so add another few grand to the bill There is an article here on it.

CEProof | American Imports (ASB)

C 104A Vessels - Importation of a private vessel into the United Kingdom on transfer of residence from outside the European Community (EC)

Pete