Buying a boat in Italy.

[Tranona]

Yes, I take your point; that if VAT is reclaimed then the original VAT receipt will exist whatever it's source.

You might think that HMRC should insist on the surrender of the VAT receipt (or endorse the receipt) before refunding VAT ? - HMRC must have sight of the VAT receipt to know how much VAT to refund ?

So it can be advantageous to buy a boat on which VAT has been reclaimed if the original VAT receipt exists as the boat can be purchased for approx 20% less.

That would not work. VAT is not accounted for in relation to the item on the invoice. The trader keeps all the records, but only reports (and pays) the amount that is the difference between his VAT inputs and the amounts he collects.

You have to remember that VAT is a transaction tax and not an asset tax. This is the fundamental problem with the system. The original VAT receipt only legal status is as a record to support the trader's VAT return. The only way to be sure of the actual status of a boat is to to have details of every transaction involving the boat and determine, based on the facts whether it was a chargeable event, and then determine (if it was) that VAT was paid. The usual triggers that suggest you need to look closely are evidence of ownership by a VAT registered entity or evidence that the boat has spent some time outside the EU.

In reality, though for most boats in the UK this is all irrelevant as the only transaction that is subject to VAT is the original sale to a private citizen and all subsequent transactions are between private citizens within the UK or EU.

In most other EU states the system is different in that there is a mechanism for registering the VAT payment against the boat so there is an record independent of the VAT receipt.

 

[Portofino]

Hi, hope this is the right forum for this.

I am in the process of buying a 13m sailing boat (valued at 72.500 EUR) privatly. I am in the phase of drafting a contract to then be able to proceed to a survey and sea trial.

I have run into a couple if issues.

We have agreed a 5% deposit and I have basically taken a contract from an italian website and modified it with a few things I felt needed to be include. In essence I have added the following two clauses -

1. If the seller decides not to sell for personal reasons then they must return any funds already paid plus an additional €3625 EUR (5%) from the seller to cover buyers expenses.
2. If the survey finds any undisclosed structural, electrical or mechanical faults other than would be considered cosmetic then the seller agrees to repair the faults or reduce the price to cover the cost of repair, the buyer also reserves the right to withdraw from the purchase with the return of any funds already paid plus an additional €3625 EUR (5%) from the seller to cover buyers expenses.

The seller has basically disagreed with these clauses and sent back a contract that removes any form of penalty to the seller for misconduct, basically all the risk is on us. deposit, survey and haulout costs, travel costs (7 hour round trip), we don't mind these costs if the boat is indeed in the almost perfect condition he says it is. From my untrained eye it does look good but I don't feel comfortable having no safety net as it were.

In my eye he is only risking his time if there are no penalties which seems to negate the point of a contract which IMO should be in the buyers favor since the buyer is the one taking the majority of the risk.

Another problem is that he has no VAT invoice to prove VAT has been paid, the ownership log shows the boat had three owners, a leasing/mortgage company then a private couple (I am guessing they became owners once they had paid off the leasing/mortgage) and then the current owner who purchased the boat two months after the first couple became owners (I am guessing the first couple settled the mortgage to allow them to sell the boat).. What would people here do in this situation? the current owner insists that it proves the boat is VAT paid due to the fact he purchased it from a private individual, I think that is BS and I don't see why there wouldn't be some form of invoice unless the VAT is not paid?

Am I being paranoid or over the top? Am I wrong with my contract?

regards

Sam

You are applying a UK out of date boat buying mechanism .
Why are you doing all this ?
It’s a big ask for the other side to compensate you for your alleged expences ( 5% ) on top of a deposit refund if the deal stalls for what ever reason .

I asked for shed loads of pics , built up a report ,a positive one at that with the broker , we negotiated the price over the phone based on broker “ will you buy this boat for -x “
Me “ if it’s described then yes ,”
Can I come and have a go in it trial ,I’ll pay for the diesel - I offered €200 -
Oh and can you pick me and mate ( read minder ) up from Naples airport ps .

Off i toddled — picked up taken for a coffee / breakfast.
Viewed boat with the crew lad - engines cold , lifted every access plate etc .
Started up off we went ,To Capri and back in a F 5
“ is it ok to WOT it “ ans sure so I did for 10 mins = all ok .
Broker parked it back in the marina in Naples ,Refused to accept my offer of fuel bill .
We had another critical look arround ,agrees it needed new risers , anchor chain , autopilot fixing and a few more bits .
He wrote that down , we shook hands on the previously agreed price ,
He took us to his “ cousins “ restaurant for a proper Naples Piza , we agreee his payment method got his 5 % down to 3% ,
In an envelope when I come back to collect .
He arranged transport back to airport .
Next day I sent by wire 10 % to the owners sisters account .( I had a copy of the reg book 10 pages ) Private Owner So VAT paid status .
A day of so later broker sent me pics of boat being lifted at the Apreamare Yard across the bay for the works we agreed - funded by the owner ,I got a pic of the old risers offf ,new on etc .
Del / hand over / my return planned 2 weeks later from the 1 st trip .
Broker picks up from air port ,takes my mate and myself to a super market to provision , arranges a del skipper to help del the new boat to me to Cannes .
Balance sent on the Thursday by wire for a Sat hand over .
A temp dereg doc has been issued and with that and the blue reg book off we went 600 mikes in 2 days to Cannes .
I sent the originals blue book back ,and he arranged to “ irradiation “ of the flag .
We were stopped by Guardia Finanza on the 1 st day @ Roma , all the paper work in order. Still an Italian flag .

I would ask if you can go and view it ( after asking for more pics ) — go out in it ,
Then trust each other and buy it .If it’s got a blue reg book it’s VAT paid if a private individual.

 

[pagoda]

You are applying a UK out of date boat buying mechanism .
Why are you doing all this ?
It’s a big ask for the other side to compensate you for your alleged expences ( 5% ) on top of a deposit refund if the deal stalls for what ever reason .

I asked for shed loads of pics , built up a report ,a positive one at that with the broker , we negotiated the price over the phone based on broker “ will you buy this boat for -x “
Me “ if it’s described then yes ,”
Can I come and have a go in it trial ,I’ll pay for the diesel - I offered €200 -
Oh and can you pick me and mate ( read minder ) up from Naples airport ps .

Off i toddled — picked up taken for a coffee / breakfast.
Viewed boat with the crew lad - engines cold , lifted every access plate etc .
Started up off we went ,To Capri and back in a F 5
“ is it ok to WOT it “ ans sure so I did for 10 mins = all ok .
Broker parked it back in the marina in Naples ,Refused to accept my offer of fuel bill .
We had another critical look arround ,agrees it needed new risers , anchor chain , autopilot fixing and a few more bits .
He wrote that down , we shook hands on the previously agreed price ,
He took us to his “ cousins “ restaurant for a proper Naples Piza , we agreee his payment method got his 5 % down to 3% ,
In an envelope when I come back to collect .
He arranged transport back to airport .
Next day I sent by wire 10 % to the owners sisters account .( I had a copy of the reg book 10 pages ) Private Owner So VAT paid status .
A day of so later broker sent me pics of boat being lifted at the Apreamare Yard across the bay for the works we agreed - funded by the owner ,I got a pic of the old risers offf ,new on etc .
Del / hand over / my return planned 2 weeks later from the 1 st trip .
Broker picks up from air port ,takes my mate and myself to a super market to provision , arranges a del skipper to help del the new boat to me to Cannes .
Balance sent on the Thursday by wire for a Sat hand over .
A temp dereg doc has been issued and with that and the blue reg book off we went 600 mikes in 2 days to Cannes .
I sent the originals blue book back ,and he arranged to “ irradiation “ of the flag .
We were stopped by Guardia Finanza on the 1 st day @ Roma , all the paper work in order. Still an Italian flag .

I would ask if you can go and view it ( after asking for more pics ) — go out in it ,
Then trust each other and buy it .If it’s got a blue reg book it’s VAT paid if a private individual.

Not identical, but similar.
Last December we saw a boat we liked the look of - in Kiel in Germany. We contacted the broker and flew over to see the boat - with a local surveyor in January. Good boat. Our choice. Paid 25% deposit. Collected in April having paid the remainder. To the owner's widow directly. Broker was family friend of deceased owner. OK by us - all decent people once we met them. You have to have some trust in the transaction and people if it's the boat you want? We got a copy of the owner's original purchase invoice. If it is the boat for you - with luck it will not pass you by

 

[Portofino]

Agree trust each other cuts both ways

This is what happens when a British boat buyer attempts use the survey “ chip “ on an agreed sale .Put your self in both the buyer and seller s shoes .
Our EU friends see Brits as problem buyers .

http://www.ybw.com/forums/showthread.php?489159-Broker-acting-with-Power-of-Attorney

 

[Sailfree]

Agree trust both ways works great when both are trustworthy BUT it can go wrong and that's when you want a legal document clearly stating who is bearing what risk.

That my experience in boat buying when frankly the biggest and only problem was buying a new boat from an official UK Jeanneau dealer- never any problems selling ex-charter boats!

However I make my original statement after 52yrs in the construction industry and in all transactions firmly believe fairness is best achieved from a position of power. I intend to be fair but the legal contract constraints the other party to a position of fairness

 

[alan]

To original poster: I am in Nettuno (50Km South of Rome) and if the boat is located in my area (Rome/Anzio/Nettuno), I would be happy to have a look for you and also meet with the seller. Sometimes face to face is a much better way of assessing the situation. Please PM me if I can help.

Alan.

 

[spindreams]

Okay wow lots of great replies (that I didn't get notified for). Let me just say thanks, feedback is great and just what I needed. I now feel a lot better about the lack of VAT paid invoice since he has a registration blue book which looks legit and I have done due diligence on the previous owners also. He has even contacted them and received some evidence of VAT payments for the leasing so has gone out of his way to reassure me.

The boat if anyone is interested is a 2005 Bavaria 42 cruiser, I have seen her but not sailed her yet, the interior and exterior look immaculate with very little wear and tear, engine is spotless as are the bilges and has just over 1000 hours on the mother which is nothing really, the first owners where quite old and the current owner didn't use her much and just maintained her so I don't think she was used a whole lot. No chartering for sure.

Came with 400w of solar, 100w wind, 480 Ah house batteries (getting on a bit but he says are fine), Raymarine kit and chart plotter (Bit old bit functional) plus radar which is something you don't see a lot on coastal cruiser.

It has a furling main and Genoa and an Asymmetrical spinnaker (Unused), full teak deck, 60M of anchor chain and a Bruce anchor. Two TVs, two electric heads. 2.6m tender and 6HP 4 stroke engine.

Asking price 75k which I thought was reasonable already but I managed to get a bit off anyway to 72500.

Wish me luck with the survey and sea trial.

Regards

Sam

 

[spindreams]

To original poster: I am in Nettuno (50Km South of Rome) and if the boat is located in my area (Rome/Anzio/Nettuno), I would be happy to have a look for you and also meet with the seller. Sometimes face to face is a much better way of assessing the situation. Please PM me if I can help.

Alan.

Thanks for the offer Alan, It isn't near you, it is an North Sardinia, I live in south Sardinia so not a problems getting to see it in any case.

 

[spindreams]

You are applying a UK out of date boat buying mechanism .
Why are you doing all this ?
It’s a big ask for the other side to compensate you for your alleged expences ( 5% ) on top of a deposit refund if the deal stalls for what ever reason .

I asked for shed loads of pics , built up a report ,a positive one at that with the broker , we negotiated the price over the phone based on broker “ will you buy this boat for -x “
Me “ if it’s described then yes ,”
Can I come and have a go in it trial ,I’ll pay for the diesel - I offered €200 -
Oh and can you pick me and mate ( read minder ) up from Naples airport ps .
.

Thanks, not sure I quite want to be so slap dash with my life savings but each to their own.

Thanks you have however given me some perspective I was after.

Regards

Sam

 

[spindreams]

We not long sold our last boat privately and not only are both seller and buyer happy we become good friends ,

You say your payin 72k , but What was the asking price of the boat ?

75k

 

[spindreams]

By italian law any transaction concerning registratio/deregistration MUST be carried out by the public officers within 20 (twenty) days.
To save administrative costs (an italian boat sale IN ITALY is subject to specific taxation and registration cost by a Notary) once You and the seller agree, he can ask for the "Nullaosta alla cancellazione dal RID" (Permission of cancelling the boat from the Italian Register of Boats), once he gets it, he can register under UK flag (SSR?) with your help and then proceed to a sale in the UK, under UK terms and laws (which, in my understanding, does not imply any taxation but I might be wrong).

I am British but live in Italy. I plan to register the boat in Holland for simple convenience and cost (Couldn't say no to €400 inc radio). I definitely don't want it registered in Italy (Land of taxes and red tape).

 

[spindreams]

You are making it overcomplicated. The model RYA contract is a good basis and covers the issues you want to add. It can be equally applicable to buying in Italy except the seller is unlikely to accept dispute resolution under UK law. Not surprised he rejects any condition that relates to your travel expenses pre sale - that is your risk, as is the survey and haulout. The deposit is of course returnable if the sale does not complete because of the outcome of the survey. If he withdraws then he is in breach of contract so in theory he should cover your costs but actually recovering them might be hard work.

A contract should be fair to both parties, not biased to the buyer or seller and on balance the RYA type contract achieves this. It is rare for a seller to withdraw once he has signed a contract - that is the whole purpose of the contract to get both parties legally committed.

As to the paperwork for the boat, if it is registered in Italy then that is sufficient to show that VAT has been paid as it cannot be registered without evidence - that would have been done at the time the boat was transferred from the leasing company. This is different from the UK where we have no compulsory registration system and the only record of VAT payment is the original invoice to the first private buyer. Provided you have record of registration and transfer of title to you together with deregistration from the Italian register you will not have any difficulty with officialdom about VAT.

Thanks, just what I needed to hear. I have already called off the dogs regarding the VAT issue and now I am toning down my contract a little.

Thanks

Sam

 

[Tranona]

I am British but live in Italy. I plan to register the boat in Holland for simple convenience and cost (Couldn't say no to €400 inc radio). I definitely don't want it registered in Italy (Land of taxes and red tape).

You could register on the UK Part 1. Once you have the tonnage survey it is only £50 every 5 years and the radio is free! will not affect your ability to move round the EU whatever happens after 2019 as VAT was paid in Italy. State of registration has no impact on freedom of movement of the boat - only VAT matters.

 

[PuffTheMagicDragon]

You could register on the UK Part 1. Once you have the tonnage survey it is only £50 every 5 years and the radio is free! will not affect your ability to move round the EU whatever happens after 2019 as VAT was paid in Italy. State of registration has no impact on freedom of movement of the boat - only VAT matters.

But, if he continues to live in Italy, i.e., the EU, wouldn't a 'foreign' boat that is registered in a non-EU country (the UK post Brexit) draw the attention of the Guardia di Finanza?

 

[spindreams]

You could register on the UK Part 1. Once you have the tonnage survey it is only £50 every 5 years and the radio is free! will not affect your ability to move round the EU whatever happens after 2019 as VAT was paid in Italy. State of registration has no impact on freedom of movement of the boat - only VAT matters.

For the cost I was quoted of getting someone over to sardinia for a tonnage survey (inc registering the boat for me) was almost 2k GBP + VAT. I can pay for reg in holland without need of a survey for two years and 2 year renewals for the next 10 years plus know I wont have issues from Brexit fallout. However much I would love to be under the red ensign the holland flag looks okay too.

In any case initially it is the easiest option, once things are clear after brexit I can sail to somewhere with an RYA inspector close by to get the tonnage survey and then maybe I will move the flag over to the UK and take advantage of the cheaper annual cost, free radio does seem nice (€100 a year in holland).

thanks

Sam

 

[spindreams]

But, if he continues to live in Italy, i.e., the EU, wouldn't a 'foreign' boat that is registered in a non-EU country (the UK post Brexit) draw the attention of the Guardia di Finanza?

Yes, anything to avoid the wrath of the Guardia di Finanza, They keep confusing my UK passport for Ukrainian.

 

[Spyro]

You are applying a UK out of date boat buying mechanism .
Why are you doing all this ?
It’s a big ask for the other side to compensate you for your alleged expences ( 5% ) on top of a deposit refund if the deal stalls for what ever reason .

I asked for shed loads of pics , built up a report ,a positive one at that with the broker , we negotiated the price over the phone based on broker “ will you buy this boat for -x “
Me “ if it’s described then yes ,”
Can I come and have a go in it trial ,I’ll pay for the diesel - I offered €200 -
Oh and can you pick me and mate ( read minder ) up from Naples airport ps .

Off i toddled — picked up taken for a coffee / breakfast.
Viewed boat with the crew lad - engines cold , lifted every access plate etc .
Started up off we went ,To Capri and back in a F 5
“ is it ok to WOT it “ ans sure so I did for 10 mins = all ok .
Broker parked it back in the marina in Naples ,Refused to accept my offer of fuel bill .
We had another critical look arround ,agrees it needed new risers , anchor chain , autopilot fixing and a few more bits .
He wrote that down , we shook hands on the previously agreed price ,
He took us to his “ cousins “ restaurant for a proper Naples Piza , we agreee his payment method got his 5 % down to 3% ,
In an envelope when I come back to collect .
He arranged transport back to airport .
Next day I sent by wire 10 % to the owners sisters account .( I had a copy of the reg book 10 pages ) Private Owner So VAT paid status .
A day of so later broker sent me pics of boat being lifted at the Apreamare Yard across the bay for the works we agreed - funded by the owner ,I got a pic of the old risers offf ,new on etc .
Del / hand over / my return planned 2 weeks later from the 1 st trip .
Broker picks up from air port ,takes my mate and myself to a super market to provision , arranges a del skipper to help del the new boat to me to Cannes .
Balance sent on the Thursday by wire for a Sat hand over .
A temp dereg doc has been issued and with that and the blue reg book off we went 600 mikes in 2 days to Cannes .
I sent the originals blue book back ,and he arranged to “ irradiation “ of the flag .
We were stopped by Guardia Finanza on the 1 st day @ Roma , all the paper work in order. Still an Italian flag .

I would ask if you can go and view it ( after asking for more pics ) — go out in it ,
Then trust each other and buy it .If it’s got a blue reg book it’s VAT paid if a private individual.

Sounds like a much more sensible way. The OP is asking too much. If he really wants the boat, go and see it first then decide, make a holiday of it. He admits he has an untrained eye. What he is suggesting is ridiculous. If i was the seller i wouldn't be agreeing to any of it.

 

[macd]

But, if he continues to live in Italy, i.e., the EU, wouldn't a 'foreign' boat that is registered in a non-EU country (the UK post Brexit) draw the attention of the Guardia di Finanza?

It quite likely would attract greater attention from EU officials, and the OP may wish to avoid that risk. However, Tranona is right: his UK-registered boat would be perfectly legit. The bigger post-Brexit issue will be the status of the owner rather than the boat, but from the sound of it the OP has Italian residence, so should be fine. No doubt he will know.

We are in almost exactly the same position, albeit with a boat (VAT-paid in Spain) which we already own.

 

[KellysEye]

You did the contract the wrong way round the punitive clauses are not in a normal contract, which is sale subject to survey. Then if the survey finds things wrong you negotiate the repairs and walk away if not satisfied.

 

[sailaboutvic]

One thing about private sellers , we too helpful and obliging .
Before I sold my boat in Aug , there where too many mistake made on my part , and only once I learned the right way to sell that I got serious buyers .
Mistake 1 , don't do any sea trial until a contacted is sign .
Mistake 2 if a buyer is moaning about the Amount of deposit then he has to pay , watch out .
Mistake 3 use an contact something like the RYA , don't invent the wheel .
Mistake 4 don't alter contact to suite you or the buyer , more contact are fair to both party .
Mistake 5 offers over the phone before the boat is seen are not worth considering.
Tell them that they can make a offer after the boat is view .

Cutting out mistake will get rid of he tyres kickers , sea trails are just that , to check over equipment you can't check while the boat is on the hard or in the Marina , it's nothing to do with how well the boat sails or how well it points .
So there no point in sea trial until after the survey has been done and everything is what it should be .

Viewing , offer, survey, sea trial.

Nearly all broker contact have a clause saying that unless major fauit are found the buyer can't just walk away .
What count as a major fauit can be stated in the contract , normally is engine , gearbox , GRP like osmosis, keel , mast damage , at this point the buyer can ask for his full deposit back ,
other fault that are found are then agreed by the party's how they will be put right,
Don't expect to knock off 8 or 10 k of the asking price and then expect the seller to replace a bad seacock or a leaky window ,
Also if the rigging over 10 old your offer should allow for this so again don't expect to knock anther 5 k for replacing rigging .

I say this to buyers .
Have a good look around the boat , take account what need to be replace and the cost then make your offer , that way anything found you have already recovered the cost of repairs , that way you not wasting money on a haulout and surveyor .
Any major problem found can be decided how they will be put right or you have to option to walk away .
But most of all be fair with your offer , I stop any conversation that started with stupid offer , one guy offer was less then half the asking price , needless to say he never got the boat , his lose .

To the seller .
Have a good web site with plent of photo lots of close up including things like keel bolts ,
Make a Video to send to buyers again plenty of close up of the hull , show under floor and under seats and lockers .
If you not using the boat get it on the hard , that way buyer will be more interested has it will cut their cost when it come to surveying , plus it stop the time wastes who just looking for a day sail .
Be honest with your answer , no good knocking 500 hours of the clock , soon or later it will come to light .
Give the viewer plenty of time to view , leave them to it for a while .
One last thing get rid of your crap and make sure the boat is clean .
What put some people off is owners personal bits , they can't see beyond the crap .

To the OP I say this , if you given me that contract , I too would had send it back .