buying in usa

[shanegoodhand]

Hi everyone,

Myself and my wife (who are totally new to sailing) have just sold up, done our coastal skipper qualifications and are contemplating purchasing a Gemini 105 in the USA, to take a year out cruising in the USA & Carribean area (ish).

If a UK couple were to buy a USA flagged vessel to do the above, what would be the pitfalls?

Do we keep it USA registered or change to British?
Would there be any US tax to pay when we bought or resold?
If we visited an EU territory, would we be liable for VAT or have problems with RCD status?

where is the best place to officially find out the questions above?

Thanks for any help

 

[Lizzie_B]

I can tell you all about it, but basically if you intend to stay in cruising area suggested
1. Register SSR (british) and in most states of USA you will be exempt state sales tax with a few proviso's
2.Will not be liable for EU taxes and Regs in Caribean EU territories unless you plan to stay in them for 12 months
3.Be prepared to move north during hurricane season or you will find it very difficult to get adequate insurance at a sensible price
4. Tax on resale in USA is down to purchaser
5. Get user fee decal from US Customs and Border Protection rather than cruising permit - it is much simpler and less hassle.
6.Try and get a ketch with modest draught and mast height. It will open up a much wider selection of cruising grounds to you as well as making some Inland waterways simpler for you to use.
7. Join Boat US - their equivalent of RYA but 1000 times better. ( www.boatus.com ) They have excellent insurance deals,car hire discounts and a boat history search database to help you weed out hurricane damaged boats etc.- They are and invaluable research tool.
8. Choose a boat make with a strong owners association, and preferably from a manufacturer who is still in business or who has been taken over by someone still in business. It has been an absolute godsend to us and provided with loads of good contacts to provide local knowledge and hospitality wherever we have cruised. Owners Associations are very strong in US. Make use of them. Mine are www.catalina38.org and www.sailccyc.org to give you examples of what's on offer.
If you are not planning to return boat to the UK makes a great deal of sense to buy and equip in the US.
The best places to buy are away from the main yachting areas.
PM me as your plans firm up and I will do all I can to help. We bought our boat out there 2 years ago and have never regretted it.
Things to consider are where you're buying, lay up areas etc. We have found doing some research can save a lot of pennies.

 

[Salty John]

Adding to what Lizzie_B has said:
Only a US citizen can skipper a US "documented" vessel, so when you buy the boat, if it is documented, you need to have it de-documented - a simple procedure.
If you want to keep the boat in the US it is best to State register it - you will need to pay the sales tax or show valid reason for exemption. Thereafter you pay an annual or two-yearly decal fee, depending on the state.
Your immigration status and that of the boat are different - keeping your boat in the US does not give you any additional rights. You can enter the US on their visa waiver programme for 90 days max, you can apply for a B1/B2 visa which would give you up to a year or you may be in a position to get a green card and work. If you take the boat out of the USA, to go to the Caribbean for instance, you will need the appropriate visa to return to the US, or to enter any US territory such as USVI and Puerto Rico. You cannot enter the USA on a boat under the visa waiver programme - it must be by an approved carrier.
Register on the small ships register, which will provide the minimum level of documentation for the Caribbean and beyond.
Have fun!

 

[Lizzie_B]

Actually John, you're not completely correct there. It took me a great deal of time and research but eventually I discovered the following.

1. Agree, if vessel coastguard documented you have to undocument it.

Also if vessel state registered you have to de - register with that state as well or you may be pursued for subsequent registrations and property tax assesment depending on the state you purchase in.

2.However, if a british citizen small ship registers the vessel on purchase and presents the registration certificate to the state authority it exempts you from sales tax and the requirement to register in a state (in fact dual registry is illegal for a british flagged vessel) and also exempts you from property tax assesment by the state you keep your boat in.

As part of the sales tax exemption deal it is usually necessary to move your boat out of the state of purchase within a set time limit (for Florida it is 90days, or 20 days after the vessel leaves a Recognised Repair Facility if there was work necessary to make her seaworthy)
You may then not return to the state of purchase for a set time period (FL is six months) after which you can re enter and be exempt.

3.If SSR registered you get a national user fee decal from CBP rather than a state decal. These are available on line providing you are using the vessel for private leisure only - you cannot go this route if you plan to use the boat for charter or any other commercial purpose.

The user fee decal covers you for unlimited exits and entries for Canada, Mexico and Caribean. There is a list of all the 'contiguous countries' on the website.

If you are coming for max 90 days you can fly into the US on visa waiver - sail to and from the Caribean as long as you leave from the states on a recognised carrier.
However, you can't use visa waiver if you plan to stay more than 90 days or if you fly into the states and then sail to caribean and fly home from there. Then you need a visa because you are not leaving US on recognised carrier. There is a specific visa for yacht crew to use in this scenario.

The other route is to get an annual cruising permit - however, these cannot be renewed unless you leave the US for a minimum of two weeks before renewing.
Also in this case if you leave the US, say to go to the Caribean or Mexico for a couple of weeks, then you must have a visa (you cannot use visa waiver) for you and every member of your crew.
The other thing is that there is quite a wide variation between different states on their rules so it is important to do the research.

4. Keep all your paperwork on board and up to date in a file. The only thing I have ever actually been asked for is the British SSR certificate when boarded by USCG, but you never know.

The websites are often ambiguous, and I got nowhere until I actually made direct contact with the small boat specialist at Florida Department of Revenue, after which life became much easier. /forums/images/graemlins/cool.gif

 

[npf1]

There is, as far as I am aware, only one way of legally not paying VAT of having RCD issues if you're planning to bring it back to the UK at some point. It requires a whole load of conditions to be met, however from the info given, you might be in a position to meet those conditions, if you wish to jump through a few hoops.

1) RCD: it would be worth doing the research to find a boat that has visted a EEA dependency (much of the Caribbean) prior to June 1998 and has proof of the visit. IF you can prove this, there is an RCD exemption when you bring it back to Europe.

2) VAT: if a) move stop being a resident for tax purposes in the UK (too complex to go into here and consider the other implications) b) are not resident in the UK for 12 months (might be more) and c) then change your resident status back to the UK, your vessel may be imported into the UK VAT free as a 'personal possession'. If you then keep it for 12 months in the EU, it will become VAT deemed paid and you can sell it as such. HMRC Notice 8 contains much of the detail.

Hope the above is useful.

 

[Lizzie_B]

My understanding from the original post is that they are not intending to bring boat back to UK, and that by EU territories they were referring to those in the Caribean, which for the purpose of cruising around VAT and RCD would not apply as they would be frequently leaving EU territories, hence my comment to that effect.

If they were intending to bring boat back permanently into EU, well that is a whole other can of worms. /forums/images/graemlins/laugh.gif

 

[shanegoodhand]

Thats correct Lizzie_b. Thanks for all your advice.

 

[Lizzie_B]

Re reading your original post it seems you are only planning to be out for a year. In this case it may be simplest to go the cruising permit route, as if you're taking a year out you will most likely be wanting to stay for periods of more than 90 days and will need a visa anyway.

Our situation is slightly different as we keep the boat in the US year after year and fly out for a series of two to three week holidays.

There is no advantage in registering with any of the US states and lots of disadvantages, including liability for sales and property tax, the requirement to comply with that state's regulations on compulsory equipment to be carried and the need to obtain an operators licence for that state.

What sort of boat is a Gemini and where are you thinking to buy it?

It would probably be easier to carry on via PM when discussing particular details of your individual situation.

But really the first thing I would do in your situation is join Boatus before you buy anything, as their vessel history search service and their legal and insurance departments could save you a lot of money and grief just on the purchase aspects alone. They are at www.boatus.com