Boat Ownership - Advice Sought

[CloudSpotter]

I wanted tap into the collective experience for some advice on boat ownership. A friend of mine and I are planning to acquire and restore an old sailing boat that we have fond memories of for recreational use on the solent.

The costs will not be high (in the few thousands initially and then annual maintenance) but we are wondering what the most sensible way of structuring the ownership is. Is there any advantage to creating a ltd. company to own the boat or some kind of trust that might help by saving VAT for instance. Are there disadvantages when it comes to this kind of structure when it comes to appllications for moorings etc. We'll be sharing control and costs equally between us and don't anticipate taking on other group members.

Any advice gratefully received.
CS

 

[franky]

If memory is correct RYA publiush a booklet on shared ownership.If you are an RYA member you could ask their advice.Good luck.

 

[Skyva_2]

Hi,

There is no advantage in a company for the type of ownership you are considering, the Revenue will not give it house room unless there is a substantial element of chartering for gain. As Franky says there is a standard agreement for syndicate ownership published by the RYA, but I think it is only on the members area of the RYA website.

 

[BlueSkyNick]

welcome to the forum, i hope you enjoy and learn from it as much as the rest of us.

the VATman will not consider you registered until the company has made a taxable supply, ie sold something and earned revenue.

its been considered by many on here and the general consensus is dont bother unless its your full time occupation.

as others have said, the RYA will help even if you just phone them

 

[Mirelle]

These have all been tried before, many times...

Corporate ownership will attract the attention of the Revenue (who keep an eye on the Register of Ships, btw) and do no good unless you own at least two yachts and the business is really chartering.

Likewise no mileage in a Trust.

If you want to own the boat jointly you do of course have the option of joint tenancy or tenancy in common i.e. you can own all 64 shares jointly or you can own 32 each.

 

[kengill]

Welcome to the forum

We're a crusty old lot as a drool..... /forums/images/graemlins/grin.gif

 

[Talbot]

I would also like to welcome you.

On the subject of boat ownership shared between friends. This can become an issue that can split friendships and cause financial problems. It is strongly recommended that you do this using a written form agreeing how costs are shared, how maintenance is shared, and how new equipment is bought, and do this on official paperwork , and RYA do have an appropriate form.

 

[Danny Jo]

Re: These have all been tried before, many times...

You also need to think about how you will sort out how you will deal with:
(1) contributions in time: if one partner spends more time on maintenance than the other, how do you calculate the credit/debit?
(2) purchases of optional extras by one partner (e.g. impulse buys at boat shows) where the other partner would be quite happy to do without them.

 

[gjbentley]

Just make sure that your partnership is not based on a hand shake alone.

Get a detailed partnership agreement into writing and signed up to.

Just like it can go wrong in a marriage, so to can a syndicate partnership ownership of a yacht.

 

[Richard_Peevor]

Re: These have all been tried before, many times...

[ QUOTE ]
You also need to think about how you will sort out how you will deal with:
(1) contributions in time: if one partner spends more time on maintenance than the other, how do you calculate the credit/debit?
(2) purchases of optional extras by one partner (e.g. impulse buys at boat shows) where the other partner would be quite happy to do without them.

[/ QUOTE ]

Coming out of the otherside of a failed boat ownership partnership I fully agree with the above. My partnership didnt work because of problems with point 2 - prioritising what our limited budget should be spent on, when we should be doing something ourselves and when to pay someone else.. overall it meant not much got done... Lots of people have successful partnerships so its not all negative. Agree on a budget /yr and have plans for how you would tackle funding problems.. ie. contingency budgets etc.

Looking back I can see problems in my partnership from the outset and in hindsight we should not have proceeded.. I recommend making sure you are 100%.

GOOD LUCK!

 

[Andrew_Fanner]

Re: These have all been tried before, many times...

Silly point maybe, but based on a work colleague's experience.

One party was happy to antifoul himself, scrape, paint etc on a grid between tides. The other was not, but was happy to pay a half share of the cost of a yard haulout and antifoul. First party saw no reason to pay for a job he was prepared to do himself. This became acrimonious quite fast, down to the level of "I'll do the work so you pay me to do it" coupled with "if its paid for I expect a pro job" and the boat had to be sold. The two decided that their long standing freindship was not worth breaking over a boat.

I gather that the better off one bought the other out and now they go off on the boat again.