Buying a boat in the USA

[Denek]

Hi all I know this has been talked about on the forum many times but I can't get my head around the ins and outs and I'm sure it cause I'm thick.
We may have the opportunity to spend a year working in the US and thought about bying a sailboat there and bringing it back.
I know you have to pay import duty and vat to actually import the said boat but what about if it's left as an American registered vessel and not actually imported.
We are (hopefully) nearing retirement and intend with luck and a fair wind to cruise the med so is it feasible to not actually import to the UK but rather have blighty as a stopping off point on a longer cruise with the boat potentially ending up back in America.
Please either tell me it's possible or put me out of my misery.

 

[Tranona]

Hi all I know this has been talked about on the forum many times but I can't get my head around the ins and outs and I'm sure it cause I'm thick.
We may have the opportunity to spend a year working in the US and thought about bying a sailboat there and bringing it back.
I know you have to pay import duty and vat to actually import the said boat but what about if it's left as an American registered vessel and not actually imported.
We are (hopefully) nearing retirement and intend with luck and a fair wind to cruise the med so is it feasible to not actually import to the UK but rather have blighty as a stopping off point on a longer cruise with the boat potentially ending up back in America.
Please either tell me it's possible or put me out of my misery.

To put you out of your misery and give you one less thing to worry about - it is usually either impractical or uneconomic, and usually both, to import a US built boat into the EU.

The obvious barrier is VAT at 20% of the landed value which includes cost of purchase, any work done and shipping, although you may be able to negotiate an agreed value. The less obvious barrier is that US boats do not in general comply with the RCD which is required to legally use it in the EU. So the boat will need a post construction certificate which requires design details and ensuring that construction and equipment meets the standard. A major stumbling block is that, particularly for older boats, the engine requires EU certification (as will a generator if fitted). The cost of certification can run from low £thousands to over £10k.

So, unless the boat is modern and preferably of a type that has gained a CE mark previously, it is not practical, particularly as it will almost certainly have a low market value here. Anything that is easy to import, such as an Island Packet is little cheaper in the US than here. The "cheap" boats are cheap because they have no market outside the US, and many older boats are in very poor condition.

You cannot keep a boat US registered in the EU as an EU resident. Non residents can get temporary importation with restricted use as visitors, but the boat can only be used by non residents and not be sold here without going through the import process.

The same applies to the Med. All the northern countries in the Med except for Turkey are EU waters and the same rules apply. So you could sail direct to Turkey, use the boat there and sail it back to the US, but if you stopped anywhere in the EU you would have to import the boat.

Anyway, cannot see any reason why one would want a US boat for sailing in the Med when there is an abundance of well priced suitable boats already there, or available in the UK to sail there.

 

[TQA]

I think you are in luck here as you fit the profile of a returner to the UK who has his home outside the UK for 12 months [ make absolutely sure you qualify as they track your time in and out of country now]. In this case your boat is regarded as a chattel and I think you are able to avoid VAT and other hassles.

If you try and sell it in the EU I think you have to pay tax and do the certification but that would not apply if you sail it back to the Carib which in my opinion is an eminently sensible thing to do.

See this form http://www.hmrc.gov.uk/forms/c104a-vessels.pdf

I looked into this closely about 6 years ago when I bought my current boat in the USA, I am a liveaboard in the Carib and can sail back to the UK spend time in the UK then return to the Carib. No tax or hassle was involved AT THAT TIME.

The RYA had/have? an expert on this.

 

[TradewindSailor]

I agree with Tranona and to some extent with TQA.

However a returnee with a yacht still has to comply with the RCD certification at current rules, not those that existed when the boat was built. There are very few exemptions. The applicable words, if I remember rightly, are that the yacht has to meet RCD rules when first operated or sold in European Community waters, whichever the sooner. ..... my words not RCD's. Failure to comply can be expensive and might involve a prison sentence.

The RYA can probably help in more detail .... but Tranona's response is pretty succinct.

 

[TQA]

I agree with Tranona and to some extent with TQA.

However a returnee with a yacht still has to comply with the RCD certification at current rules, not those that existed when the boat was built. There are very few exemptions. The applicable words, if I remember rightly, are that the yacht has to meet RCD rules when first operated or sold in European Community waters, whichever the sooner. ..... my words not RCD's. Failure to comply can be expensive and might involve a prison sentence.

The RYA can probably help in more detail .... but Tranona's response is pretty succinct.

6 years ago I was told in writing that I did not have to comply with RCD as long as the boat mine. Sell it or charter it and it had to be certified.

Of course the rules may have changed.

 

[TradewindSailor]

It may be me who's got old information. I imported mine back in 2003 .... and was very conversant with the rules at that time.

I brought mine in via the Azores ..... where the customs gave my yacht a very high valuation and told me to pay VAT on it. I left and sailed straight to the UK where the customs gave me a certificate to say that all taxes had been satisfied as I was a returning expat.

 

[Koeketiene]

Hi all I know this has been talked about on the forum many times but I can't get my head around the ins and outs and I'm sure it cause I'm thick.
We may have the opportunity to spend a year working in the US and thought about bying a sailboat there and bringing it back.
I know you have to pay import duty and vat to actually import the said boat but what about if it's left as an American registered vessel and not actually imported.
We are (hopefully) nearing retirement and intend with luck and a fair wind to cruise the med so is it feasible to not actually import to the UK but rather have blighty as a stopping off point on a longer cruise with the boat potentially ending up back in America.
Please either tell me it's possible or put me out of my misery.

In the scenario you describe I would leave the boat US registered.
- Ordinarily, non-US citizens can not have a boat US registered, but the Delaware registration offers a loophole there.
- Be aware that if you keep the boat US registered you can not spend more than 18 (IIRC) consecutive months in EU waters.
- You may want to get in touch with HMRC - you might get a VAT/RCD exemption as 'returning expat'. However, the vessel would have to be VAT paid and RCD compliant if you do decide to sell in the EU.

 

[Tranona]

In the scenario you describe I would leave the boat US registered.
- Ordinarily, non-US citizens can not have a boat US registered, but the Delaware registration offers a loophole there.
- Be aware that if you keep the boat US registered you can not spend more than 18 (IIRC) consecutive months in EU waters.
- You may want to get in touch with HMRC - you might get a VAT/RCD exemption as 'returning expat'. However, the vessel would have to be VAT paid and RCD compliant if you do decide to sell in the EU.

Some confusion here. The relevant rules are in HMRC VAT Notice No 8. section 3.15 covers returning residents and Section 5.1 covers temporary importation.

Reading these two sections will show that the suggestions being made here are not necessarily correct.

Returning residents are defined as living outside the EU for more than 12 months - but with the rider that this definition is complex so advice should be sought about individual circumstances. The key term seems to be "normal home" - so just working in the US may not be sufficient. A boat brought in under this relief must have been owned for 6 months before import, but can then be sold after 12 months on payment of duty and VAT. There is no mention of RCD compliance, but logic suggests that it will need to comply (or be exempt) before sale.

Temporary importation is only available to non EU residents, so keeping a boat on the Delaware register and using it in the EU would not be possible. That is very clear in section 5.1 and completely logical. Why would the legislation leave such a simple loophole to avoid tax?

So, the only possibility for the OP to do what he suggests is to use 3.15, but that all depends on whether he will qualify as a returning resident, but still leaves him with the problem of dealing with VAT and possibly RCD if he later wishes to sell the boat in the EU. of course if he uses the boat in the EU under this rule and then returns with it to the US he can avoid this.

 

[Denek]

Thanks for all the replies. Nothing is ever easy is it.
Whilst driving back home from London I thought how stupid am I
Really should cruise the Caribbean before bringing the boat back anyway.
This work posting is not definate yet although we should know soon so this could all be epidemic as Del Boy would say but we are hopeful.
I will delve a little deeper if we get the go ahead.
Thanks again

 

[TQA]

WARNING there is a major 'gotcha' on US state registration.

Some/most countries like France and the French Islands do not accept it. Delaware will happily take your money and issue you with a registration but use it outside the USA and you will soon have problems.

As a non US citizen you can not get US Federal Registration. British registration is the way to go. SSR has been tightened up on as far as the residence qualification is concerned so you have to go down the part 1 route.

 

[Koeketiene]

Some/most countries like France and the French Islands do not accept it. Delaware will happily take your money and issue you with a registration but use it outside the USA and you will soon have problems.

When I was last (3-4 months ago - for work) in the Med (Croatia, Albania and Turkey) I noticed quite a few US flagged vessels.
All registered in Delaware - not a single Yank aboard any of them.

 

[Tranona]

When I was last (3-4 months ago - for work) in the Med (Croatia, Albania and Turkey) I noticed quite a few US flagged vessels.
All registered in Delaware - not a single Yank aboard any of them.

There is no restriction to having a Delaware registered boat in the EU provided it is VAT paid. There is no direct connection between VAT status and registration.

You may well find that many of the boats you see are charter boats or they are owned by citizens of countries where local registration is difficult or the owners do not want their authorities to know about their boats. Examples of this could be Italy, Bulgaria, Romania, Croatia, Slovenia, Greece, Turkey. You do not have to be a US citizen or resident to use the Delaware register, which is why it is often used as a flag of convenience. Not dissimilar from many Red Ensign flagged boats that do not belong to UK citizens or residents.

 

[Heckler]

I think you are in luck here as you fit the profile of a returner to the UK who has his home outside the UK for 12 months [ make absolutely sure you qualify as they track your time in and out of country now]. In this case your boat is regarded as a chattel and I think you are able to avoid VAT and other hassles.

If you try and sell it in the EU I think you have to pay tax and do the certification but that would not apply if you sail it back to the Carib which in my opinion is an eminently sensible thing to do.

See this form http://www.hmrc.gov.uk/forms/c104a-vessels.pdf

I looked into this closely about 6 years ago when I bought my current boat in the USA, I am a liveaboard in the Carib and can sail back to the UK spend time in the UK then return to the Carib. No tax or hassle was involved AT THAT TIME.

The RYA had/have? an expert on this.

My mate did it with a 72 ft ketch also brought a container over with a toyota hilux loads of other serious stuff and a harley in as goods and chattels
So it can be done but make sure if your dates out of the country
Stu

 

[TQA]

There is no restriction to having a Delaware registered boat in the EU provided it is VAT paid. There is no direct connection between VAT status and registration.

.

Not as far as the French are concerned they do NOT regard state documentation as valid VAT paid or not.

 

[wooslehunter]

On the RCD issue, as I understand it, it can be horrible to get certification at the level a boat may be intended for.

So let's say you buy a nice big blue water yacht & import it. It's clearly designed for Cat A "Ocean". Getting it certified for Cat A may be prohibitive though. What's to stop you getting certification for Cat D "Sheltered Waters". It's still RCD certified & if/when you sell it, it's up to any new owner if they use it on a lake or sail back to the US.