Buying and cruising a boat in the US

[jimali]

Hi

We are currently long term cruising in the Med aboard our 35 foot sailboat. Whilst we are enjoying it - especially the weather - we would like a slightly bigger boat. We also think it might be a good opportunity to look at a new cruising ground.

A look around the internet shows that boats in the US are currently good value. We are sure this is not the whole story and wondered what are the benefits and pitfalls of buying a boat in the US and then, for a non-Americans, cruising it there,West Indies etc for a number of years.

All comments gratefully received

Thanks Jim & Alison

 

[Salty John]

Boats certainly are good value in the USA. No problems buying and cruising there, and then taking off down island for a few years - I've done it twice and also owned four boats there.
You can visit the USA on the visa waiver programme if you use recognised transport. However, you would be wise, when you've found the boat you want, to obtain a B1 visa, which you must do outside the USA, which will allow you to stay longer than the 3 months of the visa waiver programme and will allow you to re-enter the USA on your boat and also to enter the USVI and Puerto Rico. You shouldn't arrive at these destinations by boat without a visa.
When you buy a boat you will pay sales tax, 6% or so, in the state in which it is to be mainly used. There are ways around this but I've always felt more comfortable paying the tax and avoiding any hassle.
You can and should state register the boat but you cannot, as a non-US citizen, own or skipper a 'documented' vessel - if the vessel you buy is documented there is a simple process for de-documenting it at the time of purchase.
I would advise you to register the boat on the UK SSR before you set off from the USA - you'll need a UK address for this. You can then legitimately fly the red ensign as a UK registered vessel and also avoid hassle with immigration in the islands. Within the USA, as a state registered recreational vessel, no-one could care less what flag you fly - British, American or skull and cross bones!
I think that's about all - some one else will no doubt be along to flesh out these basics.
Oh, I'm assuming you won't be taking the boat back to the EU, so haven't mentioned VAT or RCD.

 

[tri39]

John, are there any limits on how long you can leave/keep a Brit vessel in the US?
For example, arriving via the Windies to Florida and then flying home from Chesapeake area, and returning to cruise again the next year.
And what about reporting movements, and holding tank issues in the ICW.
I'd be grateful for any clarification.

 

[Salty John]

If you enter the US on a foreign vessel, and are on the list of 'approved' countries, (GB is on the list), you clear in at your first point of call and obtain a cruising permit. This allows you to cruise US waters for 12 months. (This may have been increased to 18 months). You must then leave US waters for 15 days or more and then obtain another cruising permit. If you don't have a cruising permit you can't even move from one marina to another in the same town without permission - subject to a $5,000 fine.
Some states are more lax than others regarding the renewal of a cruising permit; Florida is strict. If you want to keep your boat in the US for longer than one year you would need to import it and this may involve paying sales tax in the state in which you intend to keep the boat.
The foregoing is my understanding of current requirements but there is some confusion since Homeland Security became involved after 9/11.
You must have a valid visa if you arrive in the US by boat.

You can assume it is illegal to discharge a toilet or holding tank overboard anywhere in US waters. You may be inspected and must have a holding tank. You should, technically, have no means of discharging your holding tank overboard but it's a grey area. A sealed (wire or cable tie) Y valve is probably OK in most states.

 

[TQA]

Another option if you want to avoid problems with having a UK registered boat is to register it in the US Virgin Islands. They don't care that your British they just want the money. No Sales Tax either.

Only drawback is that some Islands esp. French ones will not accept State registrations.

I have just bought a boat in the US and will get it SSR registered cos I really Like Martinique and Guadeloupe.

You have to have a B1 multiple rentry visa if you want to arrive on OR intend to leave on a private boat.

 

[Edwin]

Hi

We are currently long term cruising in the Med aboard our 35 foot sailboat. Whilst we are enjoying it - especially the weather - we would like a slightly bigger boat. We also think it might be a good opportunity to look at a new cruising ground.

A look around the internet shows that boats in the US are currently good value. We are sure this is not the whole story and wondered what are the benefits and pitfalls of buying a boat in the US and then, for a non-Americans, cruising it there,West Indies etc for a number of years.

All comments gratefully received

Thanks Jim & Alison

When you buy a boat in the US and intend bringing it back to the UK (Europe) it will need a CE plate - details here:- http://www.michaelbriant.com/boat_import_ce.htm

Not too big a deal as long as the motor conforms easily as you will see.

If you are truly a liveaboard then you will not be required to pay VAT on it but I would only go through that exercise in the UK and perhaps with a little professional help.

If you sail into US waters then the main restriction is having the correct visa in your passport.... If you arrive by other means and buy a boat there then the visa you have is fine except it may be a little limited in the time you may spend there and will need to be extended - before it runs out.

Cruising in the USA is a pleasure. Boats, fuel, docking are all inexpensive except in celebrity places like Key West for example. I have cruised the ICW several times from the Keys to the Chesapeake and loved every minute of it. A lot of motoring involved but fuel is so cheap - what the hell. Boat spares are at least 1/3 cheaper even today and it's a great waterway.. Going coastal is a little more challenging because of the somewhat long distances between inlets to the ICW or harbours and tides. On the West Coast - Pacific side the distances between ports are bigger than in the Med and you will need to use Panama to get back to the East Coast.

I count my time cruising in US waters as some of the best and most interesting I have done

 

[Tranona]

When you buy a boat in the US and intend bringing it back to the UK (Europe) it will need a CE plate - details here:- http://www.michaelbriant.com/boat_import_ce.htm

Not too big a deal as long as the motor conforms easily as you will see.

If you are truly a liveaboard then you will not be required to pay VAT on it but I would only go through that exercise in the UK and perhaps with a little professional help.

This is very misleading. It can be a "big deal" to get a US boat through the RCD Category A which is what an ocean going yacht would be, particularly older boats and where there is no ready available information on design characteristics. This is probably the main barrier to importation of US boats into the EU. The costs of completing the tests, changing the equipment and having the inspection can run into several thousands of pounds.

Your comments on VAT are aslo misleading. I don't know how you define "true liveaboard". Individuals have to reside somewhere. If they reside in the EU and want to bring a boat in from outside the EU VAT is payable at the first state of entry into the EU. If they are non-resident they can apply for temporary importation for normally 18 months. There are restrictions on use although these allow bono fide visitors to move freely (subject to their visa). If the boat is then sold in the EU it needs to be CE and VAT is payable. For non-residents taking up residence in the EU or returning previous residents there is some relief available, but it is very tightly restricted.

The costs of RCD compliance and VAT can easily exceed any price difference between boats in the US and similar boats already in the EU.

For a good guide to both RCD/CE and VAT see the information on the RYA site.

 

[Edwin]

This is very misleading. It can be a "big deal" to get a US boat through the RCD Category A which is what an ocean going yacht would be, particularly older boats and where there is no ready available information on design characteristics. This is probably the main barrier to importation of US boats into the EU. The costs of completing the tests, changing the equipment and having the inspection can run into several thousands of pounds. .

I went into this very carefully and I think you should visit the page I mentioned on the site. There are several companies in the UK who will do the entire job for a pretty reasonable charge. In fact people/companies are inporting, particulaly motor boats, into the UK on a daily basis simply because they are so cheap in the USA. Provided you are careful over the engine type/manufacturer it is no big deal - have a look at the page.. on my site.
http://www.michaelbriant.com/boat_import_ce.htm

Your comments on VAT are aslo misleading. I don't know how you define "true liveaboard". Individuals have to reside somewhere. If they reside in the EU and want to bring a boat in from outside the EU VAT is payable at the first state of entry into the EU. If they are non-resident they can apply for temporary importation for normally 18 months. There are restrictions on use although these allow bono fide visitors to move freely (subject to their visa). If the boat is then sold in the EU it needs to be CE and VAT is payable. For non-residents taking up residence in the EU or returning previous residents there is some relief available, but it is very tightly restricted..

I did say in my post that perhaps professional advice from a lawyer/accountant is advisable but none the less - if you are truly a liveaboard and have lived in the boat as your main home for (I think it is) the previous 12 months then it is excempt from VAT when you return it to the UK. Yes you must CE plate it.
Let me assure you I have lived for years as a non resident British person, all over the world, USA, South Pacific, Asia etc with my only address as my boat. Yes I had a UK accountant and yes I paid tax in the UK but none the less I was non resident with all the advantages that implies - the CE plating is something you need to do once you get over here and as I posted better to do it in the UK where there are several companies who do it daily. It is not a DIY thing..

The costs of RCD compliance and VAT can easily exceed any price difference between boats in the US and similar boats already in the EU.

For a good guide to both RCD/CE and VAT see the information on the RYA site.

Again have a look at my page on this - I spent a lot of time investigating and getting professional advice.. Many people are on a regular basis shipping boats from the USA (even with todays problems) and CE plating them then selling them on. With the price differential it is profitable. If you do not have to pay VAT because of your status it is very very profitable

 

[Tranona]

I have read your site which does seem to say much of what I suggested - CE costs of between £6 and 10k - not insignificant on a boat valued at say between £50-100k. If it is an American design its value in the EU will almost certainly be lower than a comparable European boat unless it is one of the classics like a Hinckley, or something just not available in the EU.

As to VAT I pointed out that reliefs are available for non residents taking up residence. However, I doubt just living on a boat would automatically mean you are non-resident. It is very difficult to become non resident from the UK (or EU) as you will see almost daily in the press. If you pay tax in the UK that is usually the starting point for determining residency. HMRC is becoming more and more strict about residency, so it would be wise to get their confirmation that you are indeed non-resident before attempting to bring a boat in and claim relief.

HMRC has duty to collect tax and rules sre there to ensure that it is done fairly - not to allow people to make a profit out of not paying tax.

 

[Foxy]

Will just add, for what its worth, we are currently cruising the East coast of the US and its some of the best cruising we have ever done. The people are unbelievably friendly and generous and some of the scenery and anchorages have to be seen to be believed. Whilst marinas are now quite expensive, we have only had two days in one since June - all other times we have anchored and been 'given' docks and moorings to use, free of charge.
A few things that come to mind over the last few months:
Even with a B1 Visa, you normally are only given 6 months entry to the US at a time, which is great, but not quite enough - ask for 9 when you come in (might get it).
The weather over here can be quite spectacular at times..... be prepared for some 'exciting' thunderstorms at anchor etc
Join the ocean cruising club if you can. They are really active over this part of the US and take extremely good care of you. Many members offer free moorings, workshops and all sorts of stuff - they are too kind.
Finally, if you are looking at just one place to go, the Chesapeake is fantastic, although v v hot in summer!
We are currently in Charleston, heading South, both along the ICW and outside. Would recommend it!

Patrick and Sinead
S/V Foxglove

 

[Tranona]

PawPaw

I intended referring you to HMRC Reference Notice No 8 paragraph 4.11 which lays out the rules. Note the restrictions including those on resale and also the reference to the complexity of determining "normal home"

 

[Edwin]

PawPaw

I intended referring you to HMRC Reference Notice No 8 paragraph 4.11 which lays out the rules. Note the restrictions including those on resale and also the reference to the complexity of determining "normal home"

I have been non resident for some 15 plus years.. In the beginning my accountant applied to the relevant department of the Inland Revenue because I was living in my boat in the Mediterranean... It is not that difficult there are hundreds of British people, living in their boats outside UK waters, as non residents 'yet paying tax' in the UK... There is a IR department which handles these people and it is not unusual. You are obliged to pay tax on monies earned in the UK - resident or not.

The law about residency in any country in Europe is based on where you spend the majority of the year... 183 days to be exact in any EU country and you are deemed to be resident of that country. Becoming non resident is the reversal of this rule but you do have to prove of course that you are genuinely non resident... If I can do it then anybody can...

You suggested in an earlier post that paying around £6000 to have a boat CE plated is a bad deal if you have paid say £60,000 for it in the USA - All opinion of course but as you get at least a 1/3rd off a 2nd hand boat in the USA compared to the UK/EU that would suggest that a UK priced £90,000 was purchased 'EU' plated for £66,000 - pretty good deal I think but that's just what I think

 

[Tranona]

You are, of course entitled to your opinion, but I think you will find that things have changed in the last 15 years in respect of becoming non-resident, but maybe as you are no-resident you don't keep up with current affairs. Equally if you want to become resident again you have to demonstrate that you are taking up permanent residency.

As to importing US boats - this was for a time popular not least because of the 2 to 1 exchange rate, but that is now 1.6 to 1 eroding much of the price difference. The lower resale value of US spec boats in the UK also makes the difference less - and then if you add duty VAT and shipping (which you can avoid in part if you sail it over) you find there is little in it. If there was lots of money to be made then lots of people would be doing it and they aren't.

Of course there are always individual circumstances that may make it worthwhile, but it is misleading to say that it is either easy or normal.

 

[jonic]

Good to see you posting again Michael.

I'm away cruising at the moment so haven't got my files to hand. But as I recall you needed to be non-resident for a minimum of two years and to have owned the boat for at least six months prior to returning, with re-sale restrictions applying.

It is not a guaranteed method and needs to be checked well in advance with HMRC. The scheme is actually to enable returning non-residents to bring in personal possessions they have acquired whilst living overseas.

The RCD issue has become more difficult with regard to engines needing to meet tougher emission and sound laws. In some cases a complete new engine installation is required.

Having said all that I am actually cruising in the USA now, and some of the fire sales I have heard of in the last few weeks have been jaw droppingly cheap. Not just boats but marina berths as well. In some cases discounts of 75%.

 

[jimali]

Dear all

Thanks for all the replies. Sometimes the sheer amount of information available makes it all very confusing.

I think we would like to cruise for at least 5 years, but with no particular timetable but a general aim to have sailed from say Halifax (where we have relatives) around to Vancouver. We would stray into the West Indies and bits of South America en-route. We have discovered however from the Med that every time we have a definite plan we fail miserably - normally ending up in the totally opposite direction!

The aim would be to sell the boat there rather than importing to Europe.

Our other concern is health insurance. It has not been a problem in Europe (fingers crossed) but, from what I have read, may be in the US. Is it better to have some cover or repatriate for example?

Thanks again

Jim

 

[Edwin]

Dear John and others - good to be back and thank you for the welcome I have received on line and by PM...

You are, of course entitled to your opinion, but I think you will find that things have changed in the last 15 years in respect of becoming non-resident, but maybe as you are no-resident you don't keep up with current affairs. Equally if you want to become resident again you have to demonstrate that you are taking up permanent residency.

Really do not want to have a spat but as I am English and my income comes mainly from the UK I do try to keep up..... Becoming non-resident is fairly easily achievable and there is a IR department which deals with it exclusively but as I posted it is perhaps easier to get and accountant to do do it for you.
As for becoming resident again all I have to do is arrive in the country and sign up with a Doctor and re-enter the system.... as simple as that - trust me - I know! Having said that all that the benefits of non resident status these days are not that great... You do not pay interest on your savings but offshore in the EU there is a catchall tax of 15%... You do not pay capital gains tax but if you are cruising et al then that's not a frequent advantage perhaps.

To more serious matters the health issue is a big big problem. If you are going to spend 5 years exclusively in the USA then perhaps it is worth getting a quote from US health insurers or BUPA type Uk companies...

My problem is I was travelling to lots of countries and overall cover was very difficult - even impossible.

I solved it by taking out 'travel insurance' that allowed 90 days consecutive travel in any one trip and mainly I travelled 'home' every 3 months or so... It is a serious issue - I sailed into Phuket with a badly inflamed gall bladder and ended up under the knife with a £7,000 pound bill which would be 5 times that in the USA. I was lucky that my travel medical insurance paid out but....

I seem to remember that there were some posts here about a Pantaenius supplying cruising health insurance. It could be worth starting a thread just on that important subject.

Michael

 

[Foxy]

I can give you a few ideas as to Health insurance... its not too bas actually, especially if you manage to get 'travel insurance' instead. There are conditions allied to this, but it is possible. Additionally Pantanius and other companies provide yacht crew insurance world wide. If you are visiting the US, it really is a must.

Agree with Jonic too, some of the prices for boats here are v low and they are good boats too.

PM me if you want to know who we used for travel insurance etc

Apologies if it takes a while to get back to you... we are currently cruising the east coast US and making miles south, so not always able to get online!