MapisM
Well-Known Member
Fine, if you are more concerned about perception than actual risk...
Broker acting with 'Power of Attorney'
- Thread starter lambohill
- Start date
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Deleted User YDKXO
Guest
Not really. You could equally well argue that the cost of honouring the warranty on my boat was part of the overall cost of selling the new boat which in effect it was.
jfm
Well-Known Member
And that's the point: the seller IS entitled to pull out and keep the car. Sure he/she is liable for some financial losses but that's a different point. As a matter of property law he /she never loses ownership of the car and the would-be buyer never acquired ownership even if buyer pays in full.To correct a mistake in my original post the dealer who got judgement against him was hit for the difference in cost between his car and an equivalent vehicle elsewhere rather than the cost of a replacement car.
Henry
TwoHooter
Well-Known Member
Hope you don't mind me asking - what happens in Italy if the buyer pays both the deposit and the final payment but the seller does not register the sale and complete the registry transfer because of obduracy, illness, insolvency, physical absence from the country, or whatever? Does the buyer have to sue the seller for specific performance or the broker for return of the money if he is still holding it? Do cases actually happen? Do frustrated buyers recover their costs in such actions? And what's the minimum size or value that triggers compulsory registration and transfer of ownership of boats in Italy?
I have been thinking about all this since we bought our first boat in 2014, in the UK. I was amazed how many holes there are in the UK system for buying and selling boats. I ended up talking to the RYA's lawyer who admitted that there are occasional disasters which, in her words 'are financially devastating for those involved, but fortunately rare'. When we bought our second boat I felt more comfortable even though the boat was worth almost as much as our house, simply because (a) I trusted the broker and (b) I telephoned to transfer the final payment while I was sitting in his office with the completed Bill of Sale on the table in front of us. But even that wasn't foolproof because I had to rely on the seller (who was in France) completing the de-registration from the German registry post-completion. The long term solution to boat transfer problems will probably come from registers using blockchain technology. My own view is that sooner or later someone will create an international chattels register which earns the same pre-eminence that Bitcoin has achieved in the crypto currency marketplace. A private sector old-technology chattels register has worked for years in the UK caravan industry (the CRIS scheme) and blockchain would make it easy to implement on a much wider scale. Countries with compulsory registration of boats like Italy will presumably keep their existing systems but a trusted blockchain-based registry would give both buyers and sellers of expensive chattels a lot more comfort.
jfm
Well-Known Member
Mapism you're seeing ghosts. This is an entirely normal sensible commercial transaction by SL, not "against" any codes or principles. SL just made a warranty promise to Deleted User as part of a deal to sell a new SL to mr Monaco. I could contract today with fairline to buy a new boat on condition that they mow my next door neighbour's lawn tomorrow, and they'd probably do it. Perfectly straightforward.All well and good, if it weren't that in accounting terms what happened is that they accepted a potential liability, and actually incurred in some expenses afterwards, for a transaction they had nothing to see with.
And that is clearly against the most basic matching and accruals principle.
No big deal of course, and obviously a new fridge or whatever is still peanuts, for a boatbuilder like SL.
But I have a funny feeling that their sales dept didn't ask their CFO, before arranging this type of transaction...
rafiki_
Well-Known Member
While not your neighbour, I have some trees and bushes that could benefit from some attention too :encouragement:
Portofino
Well-Known Member
I think in Italy ,after the deposit they ( broker and seller ) get a temporary cert from the reg office .
There isn’t one central office ,they have regional like Ge or Roma or what ever .
There Reg system is engineered to collect or record the taxes , VAT status and annual boat tax .
It also recoded the owner (s) or an entity like a Co or what ever ?
Transfer s occur all the time it’s important the seller gets out so to speak otherwise the tax system carries on sending to them and presume enforcement via there guardia Finanza , they have patrol boats too and stop and check you .
However as you say at some stage ,and this is the critical bit there’s only one reg doc and it stays with the boat during transit as well as the temp cover note .So after you have paid the balance off you go .
There’s a time frame when you complete the dereg process by sending amongst other things the original cert back or if IT citizen re reg it .
Unlike the U.K. point where dropping a bag of ££ at the dealer car or boat ,house etc ,I think once you pay for a boat in IT and have the temp cert issued from the local office it’s yours .
Happy to stand corrected ( as always
) but if the boat disappears in between deposit or after balance sent , it’s not just “ you are on your own mate find a lawyer “ like the U.K. ,
It’s go to the police ( maybe Garcia finanza ? ) with your paper trail thus far and they can arrest broker / seller etc .
So the seller / broker or sellers estate in this case need to make sure the deal goes through to avoid officialdom raining down triggered by a disgruntled buyer .In otherwords it’s handled like it’s more of a crime .
Taking the €€€ and not handing over the boat
Just drop these guys a line “ I have handed € xxxxxxxx over to X and Y do you mind helping me find the boat mister “
https://m.youtube.com/watch?v=JCM_rHnvzTM
I might be wrong ^^^ ,
If that’s basically correct then Italy is probably the safest place to buy .
As far as gazuming goes ,I would have thought once you get your name on the temp cover cert from the local reg office then the other side really needs you to un reg yourself .
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MapisM
Well-Known Member
I'm afraid I must disagree with most of Portofino explanations - particularly his idea that the IT register is "engineered to collect or record the taxes". In fact, aside from the fact that there are no taxes at all on pleasure boats (we had some in the past, but not anymore), the register was originally inspired by completely different reasons.
No point in debating all its ins and outs anyhow, because on top of being boring, they are irrelevant for the answer to your first question. Which, in a nutshell, is that it just can't happen.
Mind, not because there's any automatic mechanism preventing this occurrence (in this respect, your Q makes perfect sense!), but because these transactions are typically arranged as follows:
1) both seller and buyer meet at a nautical agency, acting as witness;
2) the seller signs the sale act and the buyer pays the balance (normally with a cashier's check);
3) the registration is afterwards handled by the nautical agency or notary (whose fees are paid by the buyer).
Variations are possible - for instance, since the buyer doesn't need to sign anything, he can delegate his broker or anyone else to be present for handing over the payment simultaneously with the signature of the sale act, but this is irrelevant vs. the risk you envisaged, which is obviously covered by (3)
It's actually a rather bullet proof system, albeit possibly more bureaucratic than others.
Which btw is the reason of my post #41 in reply to petem: based on my understanding of the UK system, I can see why that RYA lawyer told you about some "occasional disasters".
And as rare as they can be, they simply can not happen with IT flagged boats - and not just from a transfer of ownership viewpoint, but also with respect to any financial liabilities possibly attached to the boat, which in IT must be also registered on boat papers (i.e. can't be hidden), under pain of nullity.
Ref. the answer to your second Q above, registration is mandatory above 10m LOA, but also owners of boats under that limit can have their boats registered, if they like.
MapisM
Well-Known Member
LOL, in hindsight I wonder why I posted my somewhat o/t comment after Deleted User explanation of how his deal was arranged, because I can see why you now think that I'm seeing ghosts...
But trust me J: since we are talking of an IT company subject to IT rules, I can assure you (and you can guess how I know) that what I was envisaging is not something for which Dan Aykroyd, Bill Murray etc. could help in any manner.
Sorry if by elaborating this I'm going o/t even further - btw I don't think anyone else is interested., but since you might be curious to better understand my train of thoughts:
From a GAAP standpoint, I understand your objection. If jfm (buyer) and FL (seller) sign a contract for the supply of a new boat, where on top of building a new boat, the seller commits to mow Rafiki's lawn and also take care of his trees and bushes (upon buyer request, Rafiki being a consenting Third Party), then I agree that FL is entitled to register (and deduct) the costs incurred as sales expenses.
Otoh, my understanding of what happened in Deleted User transaction is different, i.e.:
1) Jfm and FL sign a contract for the supply of a new boat for a price of X, where FL accept to p/x jfm old boat for a price of Y (unless sold before completion of new build). Deleted User is not involved in any manner at this stage - in fact, he's a T.P. totally unknown to both the buyer and the seller.
2) before the completion of the new build, jfm sells his old boat to Deleted User for a price of Y. FL, in spite of possibly having connected jfm and Deleted User, has zero formal involvement in this transaction.
3) FL assumes an obligation towards Deleted User (which still is, for all intent and purposes, a T.P. totally irrelevant to the original contract between jfm and FL for the new build) to guarantee the old jfm boat for 12 months against any defects.
Based on these premises (mind, they are just my understanding of the situation - if there were any differences, they obviously can affect my conclusions), any expenses incurred by FL depending on the obligations assumed towards Deleted User can NOT be considered as sales expenses - le alone COGS of the new build.
Now, whether UK fiscal authorities would still accept them as deductible expenses, based on some evidence of the relationship between them and the original contract with jfm, this is something I don't know, and if you say that this would be the case, I take your word for it - though I would still argue about the GAAP compliance.
What I can tell you for sure is that in IT those expenses would still be allowed, but only as long as accrued as non-deductible grants, in absence of any connection with the ordinary business transactions of the company.
Which is sort of funny btw, because (back to the real situation) if SL would have actually bought the p/x boat upon delivery of the new one, and would have afterwards sold her to Deleted User at the very same Y price, not only they could have deducted any warranty (or also pre-delivery refitting, if necessary) costs, but they would have been actually OBLIGED to give such warranty, regardless of the fact that the transaction, if considered in itself, would have generated a loss.
Portofino
Well-Known Member
Yeh right mate sure thing pal , it’s ok for the two parties but not the state
Italian reg documentation has the figure paid written down on some form or other during the proceedings.
Officialdom can access this figure .
The number written down can be manipulated and is .
Eg part cash beforehand , or if substantial the cash is brought in a case to the event .
The third party or parties suddenly develop a coughing fit and excuse themselves from the room ,just long enough for the buyer to slide ( all ready checked by he seller ) case under the table .
Third parties return witness the signatures etc and pass the paper work over ,
Idea is to lower the written price , taking a chunks off Gardia Finanza,s radar for all concerned .
I suspect a similar rational to mike F ,s mechanism , bearing in mind Mr “Monaco “can display all his cash at home in full view of his officialdom ,in fact he might like that .
SL are hiding the transaction ,and as JFM says “mowing the lawn “ or in a boat sence running up a tax deductible overhead taking on any warranty work if any was needed .
There was a ferrari club meet last Easter at the end of the season in Cortina , ( roads doable ) ,most turned up in a F car some in others ,Underground car park , folks arrived in dribs n drabs so not to cause too much attention .
Gardia Finanza raided the car park — picture the scene 30 odd high end cars under the hotel , snow falling etc ,black tie dinner etc upstairs .
The average declared income if the Italian owners was LESS than € 20,000 per annum .
Twenty thousand € .Story hit the news later , you know to fire warning shots to others in same predicament.
Bit of explaining required !!
Sorry MapishM ,but thats what I see .
Ps don,t shoot the messenger :encouragement:
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MapisM
Well-Known Member
Naah, why should I?
All I said is that the IT boats register is very far from being "engineered to collect or record the taxes", and you are very far from demonstrating that the opposite is true, in your reply.
Unsurprisingly, because there's no way to demonstrate something which is plain wrong, no matter how hard you try.
And fwiw (though I can't for the life of me understand the relevance to the current debate!), I never said that tax evasion ain't a problem down here.
If I should argue about that, I'd rather tell you that this is a problem for ANY Country, and if the size of this problem can be correlated with something, that's rather the overall Country's wealth, than its latitude or its language.
In other words, even the most dodgy among the IT dodgers are VERY far from being able to win a contest for the top dodgers in this planet.
Leaving aside "obvious" Countries like Russia or China, I don't think IT can hold a candle to the US of A in this respect, for instance. Or even - heaven forbid - to some smaller Countries north of the Alps, whose economies are actually SUPPORTED by tax evasion. And the plural is not a typo!
Otoh, it would be hard to beat the naiveness of most IT dodgers, who often seem to believe that their behavior is something to be proud of - to the point of giving the whole Country a reputation about that, particularly towards folks reading articles written by wannabe economic journos.
Or to those unable (or unwilling!) to see the forest for the trees...
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Deleted User YDKXO
Guest
I think he means us guys
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Deleted User YDKXO
Guest
Blimey aint life complicated. All I can say is that in nearly 30yrs of business in the UK with my poxy little company I have never been asked to explain to our auditors or HMRC why we have provided warranty or maintenance services to anyone. And we do engage in similar kinds of transactions in terms of arranging for used machinery to be sold off our books in order to facilitate a new sale and which does sometimes require us to provide warranty or service on that used machinery. Providing we make a profit out of the whole transaction thats the only thing that bothers me or anyone else. In the case of SL they would have documentary evidence to prove that they had originally offered a p/x for my boat but decided for quite understandable business reasons to arrange a sale off their books to me albeit with a warranty liability. Surely that would be enough for any auditor?
MapisM
Well-Known Member
LOL, OK, make that "just north of the Alps".I think he means us guys
Ref. life complications, I believe the difference between UK and IT is that in the former auditors do not start from the assumption that the Company has something to hide, as they actually do in the latter.
Anyway, the bottom line is that I'm afraid the answer to your last Q would be no, for an IT company.
Don't tell me I didn't warn you, if you would be considering to establish a subsidiary around here...
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Deleted User YDKXO
Guest
You've obviously never met an HMRC tax or VAT inspector
Portofino
Well-Known Member
You've obviously never met an HMRC tax or VAT inspector
I married one .:encouragement: —- A long time ago I hasten to add
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