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Old 14-02-2020, 00:57   #1
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Uk Citizen buying an un-taxed cat in the Caribbean.

I hope you can help; I have searched online as well as on this forum, but the information is not specific to my questions or is just so confusing that I need the expert help of those who have done similar or can undo the all the information from google…

I am a UK citizen, on a delivery trip to a Caribbean Island a couple of years ago I fell in love with a Catamaran. I have stayed in touch with the owner and he has now offered me first refusal on the yacht. I would love to proceed as it’s the boat of my dreams, but I’m stuck on how to proceed and the tax situation.

My very rough plan, if I go ahead, is to maybe stay and explore the Caribbean and surrounding area for a few years before heading up the coast of America, across the Atlantic and settling in the Med.

The facts.
• The present owner is a US citizen
• No TAX has been Paid on the yacht
• The yacht is registered on the American Coast Guard Register- I appreciate that I can’t keep it on this register.
• The yacht is currently in the Caribbean
• I am viewing the yacht in April in St Lucia, but purchase, if we proceed could be on any Island within reason.


My questions
• Where is the best Caribbean Island for a UK citizen to purchase?
• Where can I register the catamaran? I would like to register the yacht on the UK Maritime and Coastguard Agency’s Small ships register but I think the tax needs to be paid first?
• I’m assuming the yacht must be registered for legal reasons as well as Insurance?
• Is a private sale in the Caribbean recommended or a broker? I will have a survey done for my own piece of mind as well the insurance, but I could benefit from a private sale as the present owner won’t have broker fees…
• Will I have to pay tax as soon as the sale in complete in the Caribbean or can I continue sailing without paying tax until I get to Europe. I understand that as a UK Citizen I should pay TAX at my first landfall into Europe if I chose to import the yacht. I also read that If I take the boat out of European waters every 18 months, I can escape the tax… There also seems to a rule for UK residents where you must import the yacht within 6 months!!!… I have also read that If I pay the tax and then leave Europe for more than 3 years the boat is treated as an export and then tax is then required again once the boat is brought back… If this is the case, there must be hundreds of boats sailing the world.

So sorry for all questions. I’m hoping that those with knowledge will be able to help clear the muddied waters for me…

All the best.
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Old 14-02-2020, 01:32   #2
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

suggest you investigate the BVI for registry
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Old 14-02-2020, 02:10   #3
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

My questions
• Where is the best Caribbean Island for a UK citizen to purchase?

I don't think its going to matter

• Where can I register the catamaran? I would like to register the yacht on the UK Maritime and Coastguard Agency’s Small ships register but I think the tax needs to be paid first?

Tax and registration are two separate occurrences for a UK citizen.

• I’m assuming the yacht must be registered for legal reasons as well as Insurance?

Not necessarily, the UK doesn't require its citizens to register, but its a damned good idea since you will be visiting lots of other countries who will expect registration documents.

• Is a private sale in the Caribbean recommended or a broker? I will have a survey done for my own piece of mind as well the insurance, but I could benefit from a private sale as the present owner won’t have broker fees…

Your call, test the insurance market before buying, likely expensive if available at all, its all changing of late.

• I understand that as a UK Citizen I should pay TAX at my first landfall into Europe if I chose to import the yacht.

Correct, but there is a get out clause for bringing "chattels back to the UK if you permanently return to the UK. Worth reading up on the UK Gov website. Also note that since you may return post Dec 2020 the UK will be out of the EU therefore the normal stopping point in the Azores and paying import duty will all have changed. You may not have to pay to enter the EU only later in the voyage on arrival in the UK.

I also read that If I take the boat out of European waters every 18 months, I can escape the tax…

Probably, depends what happens with Brexit but this is the likely outcome as the UK may be treated like any other foreign country by the EU, one to watch.

There also seems to a rule for UK residents where you must import the yacht within 6 months!!!…

Nope, you don't even need to come home, just carry on cruising

I have also read that If I pay the tax and then leave Europe for more than 3 years the boat is treated as an export and then tax is then required again once the boat is brought back… If this is the case, there must be hundreds of boats sailing the world.

Post Brexit, probably, but see chattels.

So assuming you have a UK address, I would register the yacht before you fly out to buy the yacht. Bit naughty, but oh so much simpler. The Part 3 Small Ships Register is £35 for 5 years. No paperwork other than application form and cheque are normally required for SSR.

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

On the day of purchase, ensure the previous owner has de-registered the yacht (keep copy of paper work showing this). At dusk lower US flag with formal ceremony. Offer a scotch to Neptune for good luck. At dawn raise red ensign with formal ceremony. Its the proper and very British way of doing things, impresses the natives and completely baffles the Americans
Sail off into the sunset.

Presumably you are going to keep the name. When you leave St Lucia, clear customs and keep paperwork to show you have cleared out as next port of call may/will want to see this showing that you are an honest law abiding citizen. Might be tricky explaining the boat suddenly changed name, owner and country of registration.

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Old 14-02-2020, 02:17   #4
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Thank you Pete,
This is encouraging to say the least... It just looked so daunting at first...
Just to confirm, I can register the boat on the UK small ships register without having to pay the tax first?
Phil
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Old 14-02-2020, 02:26   #5
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Sorry Pete
I will be keeping the name...
Best regards
Phil
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Old 14-02-2020, 02:41   #6
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Quote:
Originally Posted by Easybeat View Post
Thank you Pete,
This is encouraging to say the least... It just looked so daunting at first...
Just to confirm, I can register the boat on the UK small ships register without having to pay the tax first?
Phil
Yes two completely different transactions. After all the boat may never return to the UK and you can't pay an import tax if you don't import it.

The SSR registration will come with a stern letter saying you must have the number displayed on the transom in a certain font, size and colour etc. Have a local graphics firm make up several (in case you stuff it up) before you depart the UK. Also buy a good quality largde red ensign, small cheap ones are poor form and they don't last well particularly in the sun. You also need a yellow burgee ready for your next port of call. Buy locally the national flag burgee for St Lucia if there isn't one on board, to keep the locals happy.

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Old 14-02-2020, 03:25   #7
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Just to confirm the registration issue, I have just bought a boat registered in France and changed the name. UK registration was done in 10 minutes on line. The only interest from them is that you have a UK address. No other checks are conducted.
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Old 14-02-2020, 03:58   #8
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Thanks for taking the time to reply... This is looking more and more hopeful
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Old 14-02-2020, 04:52   #9
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pirate Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Pete7 has just about covered everything..
You can register the boat after purchase abroad, just go on line and complete the form there.
Your home port can be whatever you choose the only thing is make sure payment is made with a UK CC or DC otherwise it raises flags and complicates things.
I have done this 3 times, once in the US and twice in the Caribbean.
Request an on line copy you can print off to use till the hard copy arrives.
Insurance I have always used Pantaenius UK based in Plymouth being a Brit.
Best place either St Martin or BVI's..
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Old 14-02-2020, 07:01   #10
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Thank you Boatman. So for my home port I could put Chichester in UK even though I’m still in the Caribbean?
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Old 14-02-2020, 08:58   #11
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Small ships register with a UK address is all you need. The register has not interest if you have paid VAT or not.
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Old 14-02-2020, 09:05   #12
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pirate Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Quote:
Originally Posted by Easybeat View Post
Thank you Boatman. So for my home port I could put Chichester in UK even though I’m still in the Caribbean?
Yup.. And your UK address but that does not need to be in Chichester.
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Old 14-02-2020, 09:40   #13
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

As you are a UK citizen residing in UK, for once you win.
As others have said, as you have a UK address you can register on the UK Small Ships Register, fast, easy and cheap. You do not have to pay VAT to register.

Now that UK is leaving EU, you can bring the boat to the Med and provided you exit the EU every 18 months, you will not have to pay VAT in the EU. At the moment Montenegro, Albania and Gibraltar, North Africa, Israel etc are havens outside the EU. There are EU countries that could levy some form of wealth tax on yachts eg Spain but that is only if you spend a long time residing there, so worth a check in that case.

The only time you may be liable for VAT or its replacement is should you bring the boat to the UK.
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Old 14-02-2020, 09:55   #14
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

It will be the current owner's task to delete the vessel from the US registry, and it will require his/her signature and the original Certificate of Documentation. You can get the form and instructions online, you might want to download them, complete them (at least your parts) and take them with you so you can watch the current owner sign and go through the process.

USCG Deletion Process

USCG Bill of Sale

You can also search the USCG database for basic information:

https://cgmix.uscg.mil/PSIX/PSIXSearch.aspx

and contact the NVDC by phone or e-mail if you have any questions. They are slow on the paperwork side, but very helpful when contacted.

https://www.dco.uscg.mil/Our-Organiz...-Contact-Info/
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Old 14-02-2020, 10:19   #15
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Re: Uk Citizen buying an un-taxed cat in the Caribbean.

Phil, you state you are a UK citizen. Are you a UK resident,i.e., live in the UK 185 days of the year?

Residency is required if you pursue Part III of the UK registry.

Registering in the BVI may be a better option while you have the boat in the Caribbean.

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

Part III registration
Register your boat on the Part III (Small Ships Register) if you want to prove the boat’s nationality when sailing outside UK waters.

It costs £35 for 5 years.

To be eligible:

your boat must be less than 24 metres long
you must be a private individual (not a company)
you must live in the UK for at least 185 days of the year
your boat must have a name

For more information, read the full guidance notes.

You can make changes to an existing registration online, for example change of ownership, address or boat details.

You’ll be sent a renewal notice when it’s time to renew.

Part I registration
Register your boat on the Part I register if you want to:

prove you own the boat
prove your boat’s nationality
use the boat as security for a marine mortgage
register a pleasure vessel
get ‘transcripts of registry’, which show the boat’s previous owners and whether there are any outstanding mortgages
Your boat must have a unique name to be registered.

It costs £153 to register for 5 years.

How to apply
You’ll need to have:

a completed application to register a British ship (MSF 4740)
a completed declaration of eligibility (MSF 4727)
5 years of original title documents (for example a bill of sale (MSF 4705), builder’s certificate (MSF 4743), sales agreement or invoice)
Send the following supporting documents:

certificate of survey for tonnage and measurement
international tonnage certificate if the boat is over 24 metres
certificate of incorporation if you’re registering on behalf of a company
deletion certificate if your boat was previously on another register
confirmation of radio call sign if you have one
To pay the registration fee you can:

send a cheque (payable to MCA)
fill in the request to pay by credit card
call the Part I registration number below to pay by credit card
You’ll be sent a renewal notice when it’s time to renew. It costs £72 to renew your registration for another 5 years.
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