Paying Tax Again on your Boat

[AndieKay]

Originally Posted by RogerLloyd

In the UK, the rule next year will be that if you take your UK tax paid boat outside the UK for over 3 years when the boat returns you will be eligible for another dose of tax, as if you had just purchased the boat from new, but based upon its current value (presumably, whatever that is with out a sale being made).

Please would you tell me the equivalent tax situation in the USA ? I.e. what tax is due on a USA tax-paid vessel returning to the USA after some years abroad ? Thanks

What is your source for this? This would be daft even by our current government standards.

Have you considered not bothering to inform HMRC that the boat has been out of the country for over 3 years?

[Montanan]

Originally Posted by AndieKay

What is your source for this? This would be daft even by our current government standards.

Have you considered not bothering to inform HMRC that the boat has been out of the country for over 3 years?

This is the current government standard for the EU and stays similar for both the EU and for the UK after Brexit's transition period ends. Strictly business as usual, and applies to all assets that were exported and thence imported back into the EU or the UK, nothing unique about the tax status of boats in this regard.

There be a very big difference between tax avoidance and tax evasion. Please don't suggest or recommend illegal activities on this forum. The penalties for making false representations to the Customs or the HMRC are rightly extreme.

[goboatingnow]

Just to clarify

Its rather worse then that . If you are a UK taxpayer , the 3 year RGR period began whenever you first took your boat out of the UK , i.e. to another country including an EU country. Its not 3 years after 31st Dec

This means that many UK boats in the Med cannot return to the UK without paying UK tax

Note this comment ( from the Uk cruising association )

"According to the joint RYA/British Marine statement HMRC now intends to apply the Returned Goods Relief rigidly. This would mean that the three-year period for returning a yacht to the UK will apply from the date when the yacht left the UK – so for yachts that left the UK more than three years ago, Returned Goods Relief will no longer be available.

HMRC have updated that to allow a once off 1 year extension of that deadline , i.e. if your boat is out three years you can return during 2021 without incurring UK VAT . After that its curtains

For boats leaving the UK on the 1ST onwards, the standard 3 year RGR rules apply ( as they apply in other EU countries )

[Montanan]

Boats are taxed like any return good. This is not rocket science. All very straightforward and routine as to international transactions.

You can claim a relief to pay less Customs Duty and VAT if you re-import goods to the UK and EU.

https://www.gov.uk/guidance/pay-less...-the-uk-and-eu


Who can claim relief

You can get this relief if you are re-importing goods into the UK or EU that have previously been exported. This is known as Returned Goods Relief.

The goods must be re-imported in an unaltered state, apart from any work that may have been carried out to maintain the goods in working order, the goods cannot have been upgraded to increase their value.

The goods must also:

have been in free circulation in the UK and EU when they were exported, unless they were originally declared to inward processing or end-use

not have been exported to be repaired or processed, if they were but the repair or process was not carried out, relief may still be available

be re-imported within 3 years of their export, shorter periods apply to goods which benefited from agricultural measures at export

If only a proportion of the original export is returned, then subject to the conditions above, relief is available.

On re-importation, any duty suspended at the time of their original importation to inward processing must be repaid. Also, any agricultural refunds received on export must be repaid.

The requirement that the goods must be returned within 3 years can be waived in exceptional circumstances.

What you can claim relief on

You can get relief on goods being imported into the UK or EU following their export from the UK or EU as free circulation goods.

This includes:

goods exported from the UK or EU as free circulation goods and benefited from agricultural measures
goods exported from the UK or EU following inward processing
goods previously declared to end-use, if the goods are put to the same authorised use when imported
goods temporarily exported using the Admission Temporaire/Temporary Admission (ATA) or Carnet de Passages en Douane (CPD) carnet procedures
goods that have been declared for an outward processing procedure and exported which remain:
unprocessed on re-import
in the same state as they were when originally exported
returned personal effects, vehicles, sports equipment or means of transport, which includes vessels.
returned professional and commercial equipment that have been hired, leased or loaned outside the UK and EU
You can get relief on pallets, containers and packaging suitable for re-use, for example if they are:

used to import goods to the UK or EU
pallets and containers previously exported or used to export goods from the UK or EU, and then re-imported to the UK or EU

VAT

In addition to customs requirements, when you claim VAT relief you must show the:

original export declaration with you as the exporter. This declaration is filed at the time you export, Do Not Forget to Declare Your Export, i.e., removed the boat from UK waters, literally derived from EXited the PORT. .
re-import declaration with you as the importer.


Time limits for returning goods

The goods must be returned no later than 3 years after they were exported in order to get this relief. We may be able to waive this in special circumstances such as:

specialised goods returning to the UK from long-term hire or loan agreements outside the UK and EU
building equipment or machinery returning to the UK after use in capital projects outside the UK and EU
exhibition goods returning after long-term display or storage outside the UK and EU
collectors’ or heritage items originally manufactured in the UK or EU and returning from overseas after re-acquisition by a UK dealer or investor, for example collectable items of furniture or ceramics
professional and personal effects returning with returning UK or EU expatriates
goods owned by Crown Servants returning to the UK after their postings overseas, the time limit for Crown Servants is currently 6 years, Crown Servants include:
diplomatic staff
armed forces
embassy
consular personnel

When to claim

You should claim relief at the time of import. If you do not do this, the UK may accept a late claim and repay the appropriate charges subject to conditions.

[goboatingnow]

Note that HMRC has already confirmed it intends to apply the RGR rules “ rigidly “( their phrase ) , to boats subject to a compromise of an additional year for boats at the three year point

In my experience extensions to the rgr relief are sometimes possible but always have to arranged before export in the first place

Transfer of Residence relief continues to be available for genuine expats coming home.

Note that it’s is not a “ normal “ circumstance. Up till now RGR did not apply at any stage to U.K. boats returning home after any length of time in the rest of the EU. This issue is a direct consequence of Brexit.

It’s quite surprising that HMRC does not allow a one time asset repatriation scheme.