VAT,proof of location in 1992

[rigpigpaul]

I am selling my boat to a norwegian who intends sailing the boat from turkey via croatia back to norway, all non-eu countries. The boat was builtand british registered in 82 and I bought it in 88. I was cruising through greece in 92 but have no proof of this. The VAT man says the new owner will be liable to pay vat if he cannot prove the boats whereabouts in 92. Can the new owner change the ownership on the SSR without paying VAT. I think he may want to eventually sell it in UK. The VAT man says the boat will have to be valued by themselves to determine the amount of VAT payable. Would it not be better to pay VAT when the new owner eventuially sells the boat because it will have less value.
thanks for your wise words
Paul.

 

[robind]

Can you not obtain an affadavit (spelling) from people that met you or those who new of your your boats whereabouts at the time. are the Vat people so dificult that they wouldn`t accept a legally sworn affadavit from say a pillar of society?
Regards
Rob

 

[smee]

The location issue was only brought in as an amnesty on yachts of unknown status, and therefore the date 31st Dec 1992, was set as the date for proof of being in EU, to be enough to be "deemed" VAT paid. In other words a mooring receipt for somewhere close to an EU border during Nov 1992, may not be enough as the boat could have strayed out of EU waters on the critical date anyway.

However if, as it appears, you are selling it in Turkey, even if you had proof of its VAT status it would be lost anyway, as any sale outside the EU renders its VAT status obsolete, and it would become liable for VAT with the new owner in the first port of entry in the EU.

The only way to keep a yachts VAT paid or "deemed" VAT paid status is to sell it on within the EU. With regard to his sailing it to UK (and selling it), therefore not just a visit, the only way around it (and that would only be if you HAD proof of it being in the EU on 31st Dec 1992) would be to move the boat to an EU country to complete the sale to him now, thereby continuing its "deemed" VAT paid status.

However as you don't have the location proof it appears that the buyer is in a no win situation and will have to pay the VAT if he enters any EU port and certainly if he enters UK to stay or sell. As a non EU citizen with a non EU registered boat, he might be able to visit EU ports without having to pay VAT but I believe the duration is limited.

Also, as a Norwegian he can't register his boat on the SSR - unless he is registered as living in the UK, (registry has nothing to do with VAT payment) and if he lives in the UK and is registered here then he is an EU citizen and will have to pay VAT anyway and upfront in first EU port and not when he sells - so if he accidentally ends up in another EU port on way home he'll have to pay it there! If he is a Norwegian citizen living in Norway, then his best best is to sell the boat in Norway (or any other non EU country).

Also given you have no documentary evidence of your yachts VAT status it is clearly going to be best for you to sell it either so it remains in Turkey, or to a purchaser who has no desire to take it to EU!

I also doubt whether UK Customs would consider an affadavit as a viable solution, the upstanding citizen would be required to have a very good memory to be certain you were in EU before midnight on 31st Dec 1992, would they not?

 

[smee]

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[rigpigpaul]

Thanks for your advice Robind and Smee. I think I will have to bite the bullet and meet the new buyer half way over the VAT liability
Paul

 

[BrendanS]

That's very nice of you, but most negotiators would start with the stance that vendor is liable, and knock VAT off the purchase price, and so should you. If your purchaser wants a negotiator, and would like to split difference, just tell him to give me a call /forums/images/graemlins/smile.gif

Seriously, VAT is a big issue, and you might have to be prepared to take a knock with a serious buyer who knows his business, and is prepared to negotiate. It's a big enough chunk of money to talk about

 

[smee]

Unless you are very afraid of losing your buyer, I wouldn't drop price or anything. As it stands in Turkey, the VAT is not an issue. It would only be an issue to citizens of the EU, and we must not forget that the EU is not the whole boat buying world but a mere 25 countries! Most buyers should know that boats in Turkey are not VAT paid and take it into account already! Given also that your buyer "may" take it to the UK eventually to sell, how can you be sure this is not a ruse to get a nice big sum off the purchase price! It really is the buyers problem in this instance. See what happens I guess, but don't knock chunks off the price too quickly!