Dual UK Australian citizens buying in Spain

[AJ-SeaChange]

I have just read through these forum posts and although there was some good info in there, they didn't really give me clarity.
http://www.cruisersforum.com/forums/...ag-178029.html http://www.cruisersforum.com/forums/...ag-196002.html

My husband and I hold both UK and Australian current passports. Neither of us have lived in the UK for nearly 30 years. We have been living in Queensland Australia for the last 20 years. We have now sold everything in Australia although we still hold Australian bank accounts and can use a friends residential address in Queensland for any snail mail. We are currently staying at my brothers place in Spain.

We are probably going to buy a yacht (up to 14m) in Spain. Not sure which one yet, not sure if it will be tax paid or not, not sure which country it will be registered in.

Once we have the yacht we plan on spending 3 years cruising the med, then a slow sail (7 - 10 years) westwards until we get back to Australia.

Now with all that as background info, would it be best to register the yacht as Australian flagged? Given our circumstances is it even possible to register it as UK flagged? Are there any benefits to registering somewhere like Langkawi?

Should we buy the yacht as UK or Australian citizens?

Should we show our UK or Australian passports when entering a new country in the med?

Looking forward to your replies. Thanks.

[GTom]

3 years cruising = long stay in the Schengen space, you will need a British passport for that. Otherwise you have to leave the Schengen countries in every 90 days.

Registration (or flag) and VAT status are different animals. If the boat is VAT paid, it can stay in the EU indefinitely, regardless of its flag. What the flag state does: it defines the on-board rules (skipper qualifications and equipment) by international maritime law. However, some countries in the Med are violating the convention (specifically Spain, where you need a skippers license from the country of your residency or nationality even under UK flag). If you are Spanish resident, on a Spanish flagged vessel you will have to hold Spanish licenses, which are quite hard to get and all exams are in Spanish.

[beneteau-500]

My personnel view rightly or wrongly I would flag uk why pay $1554 for Aussie flag when you only pay £25 for British and as I have spent the past 27 yrs sailing the med and done nurmorus pond crossings have found Brit flag far better

[valhalla360]

If this is a VAT question, you are in a bit of a gray area. Technically if you spend 3yrs inside the EU, you would likely be considered a resident and VAT would be due immediately. It's residency not citizenship that makes VAT due immediately. Of course, you may be able to hide your residency but if some official checks your passport and you haven't left the EU in 3yrs, that might be a tough sell.(If it's a VAT paid boat, it's irrelevant what your citizenship or residency is).

If it's a visa issue, just enter on your UK passport (pending any brexit changes).

As far as registration...I would think UK would be simpler and cheaper as a UK citizen.

[Pete7]

When are you going to buy this yacht? The UK may not be part of Europe in 15 months time and then all bets are off, or the Eurocrats invent something really complicated as civil servants are want to do.

For a UK registered yacht in your names you will need a UK address, friends and relatives have been used before.

Pete

[boatman61]

Pete.. Brexit aint gonna happen.. the Tories called a referendum that they were confident of winning but ended up being bitten in the butt.
Everything since then is being stage managed by May et al to create a situation so bad no one will want to leave any more.. the Tories have to many fingers stuck in fat cats pockets to afford cutting them off.
Even Farage is facing up to this reality..
If there was an honest desire by Government to leave.. we'd be out already under WTO rules instead of dithering about giving the EU all the time in the world to organise itself.

[TonyBe]

Originally Posted by AJ-SeaChange

I have just read through these forum posts and although there was some good info in there, they didn't really give me clarity.

My husband and I hold both UK and Australian current passports. Neither of us have lived in the UK for nearly 30 years. We have been living in Queensland Australia for the last 20 years. We have now sold everything in Australia although we still hold Australian bank accounts and can use a friends residential address in Queensland for any snail mail. We are currently staying at my brothers place in Spain.

We are probably going to buy a yacht (up to 14m) in Spain. Not sure which one yet, not sure if it will be tax paid or not, not sure which country it will be registered in.

Once we have the yacht we plan on spending 3 years cruising the med, then a slow sail (7 - 10 years) westwards until we get back to Australia.

Now with all that as background info, would it be best to register the yacht as Australian flagged? Given our circumstances is it even possible to register it as UK flagged? Are there any benefits to registering somewhere like Langkawi?

Should we buy the yacht as UK or Australian citizens?

Should we show our UK or Australian passports when entering a new country in the med?

Looking forward to your replies. Thanks.

To start with the easy one first:-

Should we show our UK or Australian passports when entering a new country in the med?

The UK is part of the EU (at the moment) and it will definitely be much better to always use your UK passports. With these there is no limit on how long you can spend in the EU.

Although, do note that the Brexit transition period will likely end on 31st Dec 2020 and what restrictions will be placed on UK passport holders after that date nobody knows but it is likely that you will still be better off using the UK passport rather than the Australian one.

would it be best to register the yacht as Australian flagged?

Initially, no. If the boat is VAT paid then it is easiest to leave it with an EU flag while you're sailing in the EU as there are no restrictions on how long you can stay.

If the boat is not VAT paid then you have to leave the EU every 18 months. However, as you are now living in the EU you are now an EU resident and you are not allowed to have a non-VAT paid boat and you will be required to pay the VAT on it. The only way you could avoid paying VAT is by moving out of the EU or exporting the boat within 3 months.

Given our circumstances is it even possible to register it as UK flagged?

Yes, no problem at all.

That are two different ways to register; either on "Part 1" or "Part 3" and it is Part 1 that would apply in your case.

Part 3 is what is commonly known as the Small Ships Register. However, you do actually need to be resident in the UK to have a boat on Part 3 (well, live in the UK for at least 6 months of the year anyway).

With Part 3 all you need to do is declare that you are the owner of the vessel in question, pay them £25 and they will send out a certificate.


With Part 1 you do not need to be resident in the UK you just need to be a British national (ie have a British passport). You will need to provide actual evidence that you are the owner, for example a sales agreement, or builders certificate etc covering every time the vessel has been bought and sold over the last five years.

So, that's not just when you bought it but also every sale of that particular yacht over the last five years (eg when the original owner bought it from the builder, for example, if the boat was built within the last five years).

Part 1 registration costs £125 and lasts for five years

Are there any benefits to registering somewhere like Langkawi?

I couldn't say, but don't forget that most of the discussion around that location was for people that didn't qualify to be on the British register (I think it was mostly Americans). So there may be different considerations going on.

Should we buy the yacht as UK or Australian citizens?

That has no effect on anything. Having two passports gives you both the rights and obligations associated with both countries. That will only affect which country you can register the boat in. In Europe you need to show your British passport - if, after you leave the Med, you later want it to be Australian flagged then you need to show your Australian passport.

and although there was some good info in there, they didn't really give me clarity.

I think that there's more to come on that thread in the next few days.

Hope this helped.

[valhalla360]

Quote:
would it be best to register the yacht as Australian flagged?

Initially, no. If the boat is VAT paid then it is easiest to leave it with an EU flag while you're sailing in the EU as there are no restrictions on how long you can stay.

If the boat is not VAT paid then you have to leave the EU every 18 months. However, as you are now living in the EU you are now an EU resident and you are not allowed to have a non-VAT paid boat and you will be required to pay the VAT on it. The only way you could avoid paying VAT is by moving out of the EU or exporting the boat within 3 months.

Registration does not change VAT status and if paid, the boat can stay as long as you like regardless of registration.

If you want to play the non-VAT paid 18month rule, you have to be careful not to trigger residency, so it's not just the boat that has to leave periodically but you also must leave pursuant to the definition of residency (Example: Not sure of the details but I think Spain considered more than 180 days in a year and you are a resident).

[yachtgemini]

We are Australians with permanent residency in the UK and our boat was Australian flagged but is now VAT paid and reflagged British. So we have some experience in these subjects.

If you can use your British passport it will be a massive advantage having freedom of movement and reciprocal health care benefits throughout the EU.

However, you will not be able to use the British passports and travel with a non VAT paid boat for anything but the briefest of period.

Let's assume you buy a VAT paid boat in Europe. The choice to register the boat in the UK or Australia comes down to cost and visibility as it should not have an impact on your VAT status.

We chose to re-register in the UK as our insurer required us to unless we wanted to move our insurance policy to their Australian arm. The cost difference was substantial and we were not confident of any potential claim processing from Australia versus a 'local' insurer.

The second issue for us was visibility. The Australian flag on our stern seemed to be a magnet for customs and immigration officers. We even got checked three times in one season here in the UK where we are resident. 2-3 times per season in France and nearly every port in Spain and Portugal. All our documentation was always in order but often you got local officials with a minimal understanding of the rules causing undue irritation.

The bottom line is that a VAT paid boat, UK rego and British passports will probably be the easiest and cheapest way to go in the near term.Post Brexit is mere speculation but you always have the option of registering in OZ and using your Oz passports in need.

Feel free to message me if you want any further help.

Ross

[BenFranklyn]

Here is another view for your consideration. In 2014 I purchased a 14.95 meter Nordia to keep in Europe and sail the areas from Norway and down into the Med as far east as Turkey and Greece. As an American I had heard stories from other American sailors traveling on boats in Europe with US flags and they always seemed to be inspected when going into port and having there papers and passports looked at. The most discussed item being the issue of whether VAT was due based on some transgression of the numerous regulations. I decided that it would ruin the fun of sailing if there was always some overhead stress involved with having the boat in the EU, so I purchased a boat that had its VAT paid and went about maintaining that VAT paid status throughout its refit, something that cost me an extra $75K when all was said and done. I also registered the boat in The Netherlands in what is called a Stichting or foundation as US citizens cannot own an EU yacht directly. I have to say that having a Dutch flagged yacht proved to be a good decision as it never attracts a second glance and I have never been boarded for an inspection and when entering ports I have never done anything other than filled out the form at the Harbor Masters office. The regs are tough when getting your paperwork done but now that the boat is for sale they have proven to be a solid investment as the legal standing is so strong. the biggest problem has been the Schengen limitations for a US citizen (90 days in the EU per last 180 calendar days) Staying in the UK avoided that issue but the weather has finally driven me down to the Canary Islands where I am again under the Schengen limitations but Spain can be easier then some countries if you want to obtain some form of other visa which I may do. Feel free to ask me any additional questions

[TOniGinger]

Originally Posted by TonyBe

Initially, no. If the boat is VAT paid then it is easiest to leave it with an EU flag while you're sailing in the EU as there are no restrictions on how long you can stay.

If the boat is not VAT paid then you have to leave the EU every 18 months. However, as you are now living in the EU you are now an EU resident and you are not allowed to have a non-VAT paid boat and you will be required to pay the VAT on it. The only way you could avoid paying VAT is by moving out of the EU or exporting the boat within 3 months.

TonyBe, do you know if the boat is not VAT paid in the EU (Greece) and I buy it as company registered in the EU (Romania), should I pay the VAT if I stay for more than 3 months?

[Ozifrog]

Hi want to buy my Fountains Pajot Bahia 46. Oz registered South france. gjudell@yahoo.com
Cheers

[AJ-SeaChange]

Thank you to everyone who contributed to this thread and sent PM's, some really helpful info and it has cleared things up for us immensely.

It's not about the VAT for us, it's all about the ease of travelling between countries and how long we can stay in any one place.

We are looking to buy within the next 6 to 8 weeks. Then we'll see you out there.

[El Pinguino]

Final point... as stated above you do not need a UK addy to maintain registry in UK... I use my Chilean address...

Only get an email once every 5 years..

[Pete7]

Originally Posted by El Pinguino

Final point... as stated above you do not need a UK addy to maintain registry in UK... I use my Chilean address...

Only get an email once every 5 years..

I beg to differ, of course we could always look up the rules and see what they say, bearing in mind this is England and rules are rules.

https://mcanet.mcga.gov.uk/ssr/ssr/intro2.asp