buying a boat: private vs limited company?

[AlexKT7]

Dear all, sorry for the lame question, however, I hope someone might be able to point me in the right direction. Me (UK citizen) and my relative (Ukraine citizen) have decided to jointly buy and share a second-hand sailing yacht (under £100K price tag, British Registered, VAT paid) to sail UK and Mideterenian waters mostly. What is the best way to structure this deal to be able to use this boat independently from each other if needed?

If I register this boat under my name, what paperwork will be needed for my relative to use this boat in Mideterenian waters without me being present aboard? My relative is not comfortable having his name on the UK register (together with my name) due to him having to declare any overseas ownership back home and thus having to pay hefty wealth tax every year which over years may add up to become as high as the cost of the boat.

If we buy this boat under BVI limited company name (someone suggested to register one), what paperwork will be needed for me and my relative to use this boat worldwide?

thanks
Alex

 

[Gwylan]

Try Malta, has some advantages, bit subtler. But, company owned boats can attract "attention".
What happens if you and mate fall out?
Describe how the deal unravels in that case or if one of you dies or gets divorced.

 

[Baggywrinkle]

Dear all, sorry for the lame question, however, I hope someone might be able to point me in the right direction. Me (UK citizen) and my relative (Ukraine citizen) have decided to jointly buy and share a second-hand sailing yacht (under £100K price tag, British Registered, VAT paid) to sail UK and Mideterenian waters mostly. What is the best way to structure this deal to be able to use this boat independently from each other if needed?

If I register this boat under my name, what paperwork will be needed for my relative to use this boat in Mideterenian waters without me being present aboard? My relative is not comfortable having his name on the UK register (together with my name) due to him having to declare any overseas ownership back home and thus having to pay hefty wealth tax every year which over years may add up to become as high as the cost of the boat.

If we buy this boat under BVI limited company name (someone suggested to register one), what paperwork will be needed for me and my relative to use this boat worldwide?

thanks
Alex

This bit in bold I can answer ... you need a simple authorisation of use, signed by the boat owner identified on the registration papers. The example below which I use is in German, English and Croatian .... simply translate to the native language of your cruising ground.

Mine is also for a boat registered on Part 1 of the UK Ships Register (Where ownership is apportioned in 64 shares 32/32 for joint ownership). If you are a UK resident then why not register on Part 3 (SSR - Small Ships Register) which proves nothing about financial ownership (a boat used solely in the UK doesn't actually have to be registered anywhere.) - the ownership contract can be drawn up seperately and no-one ever needs to see it other than you, your relative and a lawyer.

Here's the usage authorisation ...

Vollmacht
Authorisation
Punomoć

Schiffhalter: (Your name and address here)
Owner:
Vlasnik Jahte:

Schiff:.........Bavaria 36, „BoatName“
Yacht: .........O.N. XXXXXX, Port: „PortName“
Jahte:..........HIN: DE-BAVDXXXXX (Hull Identification No.)

Die aufgeführte Person: (Authorised users name and address)
Authorised user:
Osoba navedena:

Geboren am: (Date of Birth)
Date of birth:
Datum rodenja:

ist berechtigt, das Schiff “BoatName”, amtliches Kennzeichnen XXXXXX, für Fahrten in Kroatien und Ausland zu nutzen und notwendige Zollformalitaten zu erledigen.

is authorised to use the yacht „BoatName“, Official Number XXXXXX, for travel in Croatia and in foreign countries and to complete all necessary customs formalities.

je ovlašten koristiti jahtu “BoatName”, službeni broj XXXXXX za putovanja u Hrvatskoj i inozemstvu i dovršiti sve potrebne carinske formalnosti.

Gültig von: (Dates when he is authorised to use it)
Valid from:
Vrijedi od:

(Owner signature goes here)

... and check with your insurance company to ensure your relative is covered.

 

[macd]

Mine is also for a boat registered on Part 1 of the UK Ships Register (Where ownership is apportioned in 64 shares 32/32 for joint ownership). If you are a UK resident then why not register on Part 2 (SSR - Small Ships Register) which proves nothing about financial ownership (a boat used solely in the UK doesn't actually have to be registered anywhere.) - the ownership contract can be drawn up seperately and no-one ever needs to see it other than you, your relative and a lawyer.

Good advice.

Part one also allows two people to jointly own the boat, i.e. so each jointly owns all 64 shares. This page explains the difference: https://www.rya.org.uk/sitecollecti...yndicates/JOINT OWNERSHIP OR CO-OWNERSHIP.pdf
The main feature of joint ownership is that full title automatically passes to one owner on the death of the other, so especially suited to such as married couples.

And I think you meant "Part 3" for SSR.

 

[Baggywrinkle]

.... And I think you meant "Part 3" for SSR.

Yes I did, thanks for spotting the mistake ... now corrected.

 

[AlexKT7]

thanks a lot for your feedback, however SSR Part 3 would not work as my relative lives abroad full time. Does anyone have experience with registering under Limited company name and I guess Part 1 option?

 

[DownWest]

Not recent, but a friend who is a German national bought a British part 1 reg boat and used a Gibraltar company. He carried authorisation to use it. You and your friend could own the Gib company, but remain anonymous.
In your case, could you not reg it under Part 3, as you are entitaled, and authorise your friend to use it? As Baggy says above.

 

[Zing]

Take care with UK corporation ownership if you are a UK resident. You may be required to pay a benefit in kind tax charge for using company assets

 

[andygc]

A Ukrainian citizen cannot be a qualified owner of a British registered ship. The ship can only be registered on Part 1 if the qualified owner or owners (in this case AlexKT7) own at least 33 shares. See MSF 4727 section 2A https://www.gov.uk/government/publi...register-merchant-or-pleasure-vessel-msf-4727

 

[Graham376]

A Ukrainian citizen cannot be a qualified owner of a British registered ship. The ship can only be registered on Part 1 if the qualified owner or owners (in this case AlexKT7) own at least 33 shares. See MSF 4727 section 2A https://www.gov.uk/government/publi...register-merchant-or-pleasure-vessel-msf-4727

Yes but a non UK resident can have a financial share/loan in the boat, it just can't be registered in his/her name.

 

[andygc]

Yes but a non UK resident can have a financial share/loan in the boat, it just can't be registered in his/her name.

I did not say they couldn't, and in any case qualified owners don't have to be UK residents.

As I said, the qualified owners must own at least 33 shares. Which means that it is impossible for one qualified owner and one non-qualified owner to have joint ownership, as suggested in post #4

The main feature of joint ownership is that full title automatically passes to one owner on the death of the other, so especially suited to such as married couples.

 

[AlexKT7]

thanks, everyone for your inputs! Here is what I got from the Maritime & Coastguard Agency
"In order to be eligible for Part III all owners must be resident in the UK mainland for 186 days out of a 12-month period "

so for us it is only Part I via a limited company option, I guess

 

[superheat6k]

thanks, everyone for your inputs! Here is what I got from the Maritime & Coastguard Agency
"In order to be eligible for Part III all owners must be resident in the UK mainland for 186 days out of a 12-month period "

so for us it is only Part I via a limited company option, I guess

Three ways to achieve a tax inspection ...

1 By letter.
2 By phone.
3 Buy a boat.

Just saying. Be aware, be very aware.

 

[macd]

thanks, everyone for your inputs! Here is what I got from the Maritime & Coastguard Agency
"In order to be eligible for Part III all owners must be resident in the UK mainland for 186 days out of a 12-month period "

That's actually pretty hilarious in a depressing sort of way. The 180-odd-day definition of residence used to be their stated position, but was found to be unlawful. Their own friggin' website dropped it a while ago, now explicitly using the looser criterion of ordinary residence. (To quote: "all applicants must be ordinarily resident in the UK in order to be considered eligible for the Small Ships Register. For guidance, this usually means that applicants must be physically resident in the UK for a minimum of 185 days in any twelve-month period.")

Whoever wrote to you didn't bother to read their own website (and possibly a succession of memos to the same effect).

With your particular circumstances I don't suppose this helps you in the slightest, Alex, but it might help you feel a little more sanguine about the asylum you've ventured into.

 

[Mikedefieslife]

thanks, everyone for your inputs! Here is what I got from the Maritime & Coastguard Agency
"In order to be eligible for Part III all owners must be resident in the UK mainland for 186 days out of a 12-month period "

so for us it is only Part I via a limited company option, I guess

If the boat is owned by a company is it not classed as commercial and then must meet the various regulations around commercial craft?

Also your company is going to need to have some purpose otherwise the boat is really just a benefit in kind which is going to attract tax. Additionally you'll have all the on-going hassles of running a company, annual returns, tax returns etc..

 

[dunedin]

Dear all, sorry for the lame question, however, I hope someone might be able to point me in the right direction. Me (UK citizen) and my relative (Ukraine citizen) have decided to jointly buy and share a second-hand sailing yacht (under £100K price tag, British Registered, VAT paid) to sail UK and Mideterenian waters mostly. What is the best way to structure this deal to be able to use this boat independently from each other if needed?

If I register this boat under my name, what paperwork will be needed for my relative to use this boat in Mideterenian waters without me being present aboard? My relative is not comfortable having his name on the UK register (together with my name) due to him having to declare any overseas ownership back home and thus having to pay hefty wealth tax every year which over years may add up to become as high as the cost of the boat.

If we buy this boat under BVI limited company name (someone suggested to register one), what paperwork will be needed for me and my relative to use this boat worldwide?

By your own post you are trying to structure an approach specifically to evade Ukrainian wealth taxes.
What are the penalties for aiding and abetting tax evasion in Ukraine? Is it an extraditable offence?

Perhaps trying to be too clever can backfire.

 

[maby]

Three ways to achieve a tax inspection ...

1 By letter.
2 By phone.
3 Buy a boat.

Just saying. Be aware, be very aware.

Indeed - when we floated the idea with our accountant, she told us that she reckoned that she could get almost anything past the tax man apart from race horses and yachts. The OP needs to be confident that his finances are all whiter than white before going down this path - there's a good chance that HMRC will be all over it like a rash and the resulting pain could be more than the saving on the boat is worth.

 

[Mikedefieslife]

What are the penalties for aiding and abetting tax evasion in Ukraine? Is it an extraditable offence?

Perhaps trying to be too clever can backfire.

Probably nothing. Ukraine can't secure its own boarders, I doubt it's going to try chasing yacht owners around the world.