Buying a EU VAT paid boat in Gibraltar or Spain?

[Jason T]

Hi,
I am in the early stages of buying a UK owned SSR yacht that is currently lying in Gibraltar. I want an EU VAT paid boat so I don't have to worry about the 18 month rule of having to leave and return.

The boat was originally bought in the Netherlands in 2007 by a Dutch national and then sailed to Spain where it was sold to a German guy and then eventually sold the the current British owner 8 years ago. The boat was in the EU over BREXIT and then moved to Gibraltar last year.

My understanding is that as I am buying the boat on the premise that it will retain its EU VAT paid status I believe the deal needs to be done over the boarder in the EU otherwise I would effectively be buying the boat outside of the EU and therefore as a new owner the EU returned goods won't apply and if I were to sell the boat again in the EU the new buyer would have to pay VAT again.... am i correct?

The broker I am buying the boat for is in the UK but sells a few boats in Gib and the owner although living on the boat in Gibraltar has a home in the UK I am not sure where from a Tax perspective the deal will take place if done in Spain, UK or Gibraltar? I just want to make sure I am squeaky clean.
Can the UK broker sell a boat that is in Spain? or does he need to be registered there to sell a boat there?
Many thanks for your advice

 

[Graham376]

Should be no problems, just use the standard RYA paperwork for purchase. You could do the transfer over the border to play safe but, location of boat isn't usually mentioned on transfer of ownership. Two points - establish clear VAT paid evidence and proof the boat was in EU waters on B day.

 

[westernman]

Should be no problems, just use the standard RYA paperwork for purchase. You could do the transfer over the border to play safe but, location of boat isn't usually mentioned on transfer of ownership. Two points - establish clear VAT paid evidence and proof the boat was in EU waters on B day.

I would be happier if additionally there was proof that the boat was in the EU when you signed the bill of sale. E.g. marina bill for the day in question.

 

[dunedin]

As well as checking the paperwork, I would definitely want the boat to be across the water to be on the Spanish side (eg Alcadesia) and get the sale documented, and witnessed, there. It’s only a couple of miles.

 

[JFowler]

I believe you should take the boat to Spain to complete the sale. It might be worth getting an agent/ notary involved for peace of mind.

 

[Tranona]

Two critical things. First - there must be evidence that the boat was in the EU on B day and second the change of ownership must take place in the EU.

Up to the current owner to locate the boat in the EU and provide the evidence of status. best to use a local notary as suggested, but the contract and BoS can be under UK law.

 

[jfm]

Agree- you should complete the sale ie date and receive BoS and take physical delivery (as distinct from executing the purchase contract, for which the location doesn’t matter) inside the EU.

But one correction to OP: the consequence of failing to do this is not that vat will be triggered in the future when you sell the boat, as you wrote. It’s that you will have to pay vat as soon as you yourself bring the boat into the EU (except for TI relief which requires out/in at least every 18 months, which you said you didn’t want to be hassled by).

in practice vat liabilities might not be enforced but that’s a whole other topic that I’m not getting into.

 

[Jason T]

Thanks to all your replies, The UK Broker was ahead of me on this subject and agrees that the sale will and should take place in the EU (Spain in this case), The current owner will take it there and provide me with the receipt for the mooring in his name to prove the boat is there on transfer day. We will then complete and transfer title in Spain. He is also providing me with a the original bill of sale to a German in this case showing the hull number which shows EU VAT paid in Euros and a letter the current owner has from the marina he was resident in that the boat was in the EU during BREXIT.

I was then going to take the boat back to Gibraltar for a couple of months as he has said I can use the mooring until the end of the year. Should I stay in Spain for the first night to get a receipt in my name to prove that I am there or doesn't it matter?

Many Thanks again

 

[westernman]

I was then going to take the boat back to Gibraltar for a couple of months as he has said I can use the mooring until the end of the year. Should I stay in Spain for the first night to get a receipt in my name to prove that I am there or doesn't it matter?

Many Thanks again

I don't think it matters, but for the peace of mind I would be very inclined to stay one extra night and get a receipt in your name.