Buying yacht registered in Jersey with IVA tax paid

[GDPR150987]

Just about to buy a yacht today from a reputable broker but have held off until I inderstand if its all legit. Perhaps some on here may be able to ease my mind on it.

Situation is yacht brought in UK by UK resident who then immediately registered her in Jersey under a Ltd company to presumably escape VAT.

Yacht used all over the world and when finished said trip, she entered the EU and paid IVA tax (Spain or Canaries). Boat then up for sale in the UK.

Ltd company have stamped BOS, trustees have signed a certificate stating she is free from any taxes mortgage etc and are legally able to transfer full title to me.

The IVA is in Spanish and I can see the name of the vessel several times on it and IVA written alongside some calculations but as I dont speak Spanish It could turn out to be a tapas order? Its a duplicated computer official looking document with some form of stamps on it.

Whats the general thoughts on this? The broker says hes seen these types of IVA documents before and he feels its all legit.

Im speaking to a marine solicitor tomorrow who will check the documentation but interested in your thoughts please.

Thanks

 

[lw395]

Is the company selling the boat VAT registered? Where?
Buying it in England as a consumer from a business, it will be VAT paid.
Buying it from a Jersey company it may not be VAT paid.
Although the VAT was paid on import, a company exporting the boat to Jersey can claim that back making it non-VAT-paid.

You don't buy boats 'from' brokers. Brokers act for sellers.
I would want either a VAT receipt from an EU/UK business, or certified bills of sale showing the whole chain of ownership from when the VAT was paid in Spain, with no gaps.

 

[superheat6k]

Why not HMRC Small Craft unit for an opinion - 0300 051 6922. They were very helpful when I bought a boat in Jersey.

 

[Tranona]

I expect the original sale if it was from a UK based dealer or builder was under the export scheme. The registration (and ownership) in Jersey is probably irrelevant. The important point to clarify was the date the IVA was paid in Spain and where the boat has been since. if it has been in the EU since then it is no different from any other EU boat and if the sale takes place in UK it will be still VAT paid. If, however it has been out of the EU then the current owner will need to show it qualifies for returned goods relief to maintain that status.

So, as usual a little bit more information needed to clarify the position, but so far it looks good.

 

[Fr J Hackett]

I bought a yacht that had paid its VAT in Italy, the broker insisted that the seller supplied an attested translation from an authorised translator. It doesn't help to clarify the current status but at least you would have understandable evidence of the VAT having been paid and where it was paid at one time.

 

[GDPR150987]

Hello Gents

Many thanks for the help so far.

If Ive got it right then I think the advice is to understand the date the IVA was paid and to confirm where the boat has been since. If she has remained inside the EU since IVA paid and the IVA is infact correct and not a tapas order then its looking good.

Thanks again for your support.

 

[lw395]

Hello Gents

Many thanks for the help so far.

If Ive got it right then I think the advice is to understand the date the IVA was paid and to confirm where the boat has been since. If she has remained inside the EU since IVA paid and the IVA is infact correct and not a tapas order then its looking good.

Thanks again for your support.

As well as being physically in the EU, it is important to know the chain of ownership, in case the boat has been bought by a company which has reclaimed the VAT, then sold it VAT free in Jersey or some such. You want a trace of bills of sale from when the VAT was paid. If the seller is a company or trader you want a VAT invoice.

 

[Tranona]

As well as being physically in the EU, it is important to know the chain of ownership, in case the boat has been bought by a company which has reclaimed the VAT, then sold it VAT free in Jersey or some such. You want a trace of bills of sale from when the VAT was paid. If the seller is a company or trader you want a VAT invoice.

Not so. The IVA receipt from Spanish customs is the key document as that (if it is genuine) is the last "chargeable event". What happened previously is irrelevant. Checking the trail of Bills of Sale is of course wise, but nothing to do with VAT. However as the boat is on the Jersey register doubt there would be any questions about legitimate title assuming the seller is the same person (or company) as on the register.

 

[lw395]

Not so. The IVA receipt from Spanish customs is the key document as that (if it is genuine) is the last "chargeable event". What happened previously is irrelevant. Checking the trail of Bills of Sale is of course wise, but nothing to do with VAT. However as the boat is on the Jersey register doubt there would be any questions about legitimate title assuming the seller is the same person (or company) as on the register.

I thought my post was fairly clear that I was referring to a paper trail of ownership from when the VAT/IVA was paid in Spain.
What could have happened is something like:
Company imports yacht as part of its business, pays VAT.
Company reclaims VAT as input tax.
Exports yacht to Jersey customer, no VAT due.
Jersey customer now selling yacht, it's not a VAT paid yacht.
The Jersey customer could be another company, or an EU citizen.

This kind of malarkey goes on with smaller goods all the time, there is a lot of talk about the EU improving the VAT system.

I would want the sale to occur in the EU with a VAT invoice unless I was convinced there was no way the VAT could have been reclaimed.

Even if the VAT has not been reclaimed, if the boat has changed ownership outside the EU, it (generally) loses its VAT paid status. So you need proof of the chain of ownership.

 

[Tranona]

I thought my post was fairly clear that I was referring to a paper trail of ownership from when the VAT/IVA was paid in Spain.
What could have happened is something like:
Company imports yacht as part of its business, pays VAT.
Company reclaims VAT as input tax.
Exports yacht to Jersey customer, no VAT due.
Jersey customer now selling yacht, it's not a VAT paid yacht.
The Jersey customer could be another company, or an EU citizen.

This kind of malarkey goes on with smaller goods all the time, there is a lot of talk about the EU improving the VAT system.

I would want the sale to occur in the EU with a VAT invoice unless I was convinced there was no way the VAT could have been reclaimed.

Even if the VAT has not been reclaimed, if the boat has changed ownership outside the EU, it (generally) loses its VAT paid status. So you need proof of the chain of ownership.

This is all incorrect, as none of that has happened.

The boat was sold by Westerly to a Jersey limited company without VAT for obvious reasons. It was kept outside the EU for some time. Subsequently the Jersey company imported into the EU paying VAT in Spain. Assuming the boat has remained in the EU there is no VAT to pay as it is being sold from one non VAT registered entity to another. Just to be clear a limited company even in the UK is not necessarily registered for VAT. The IVA payment was the last chargeable event. No other VAT has been paid or reclaimed.

This is nothing to do with the trail of title. That is clear. Sold by Westerly to the Jersey company and now the owner of the company is deceased, the Executor which is a bank and has title (by virtue of being the executor) is selling it on behalf of the estate. The title is registered on the Jersey registry in the name of the Jersey company and could be re-registered in the name of the buyer, assuming he qualifies to use the register. If he is a UK citizen there will be no problem, nor for citizens of many other countries.

 

[lw395]

You obviously have more information than is in the thread.
Is the boat in Jersey or the EU?
If its in Jersey, won't there be a 'chargeable event' when the buyer imports it back to the EU, if the sale takes place there?

I have personal experience of a company owner dying. The company does not die with the owner, the shares merely pass to the estate. So any property of the company has to be dealt with by new directors sellingthe property, or by winding up the company, it's more complicated thanthat, but the principle is that the owner of a company, dead or alive does not own the company's goods. That has enough consequences in Guildford, but the J-word is a red rag to any taxman.

 

[Tranona]

You obviously have more information than is in the thread.
Is the boat in Jersey or the EU?
If its in Jersey, won't there be a 'chargeable event' when the buyer imports it back to the EU, if the sale takes place there?

I have personal experience of a company owner dying. The company does not die with the owner, the shares merely pass to the estate. So any property of the company has to be dealt with by new directors sellingthe property, or by winding up the company, it's more complicated thanthat, but the principle is that the owner of a company, dead or alive does not own the company's goods. That has enough consequences in Guildford, but the J-word is a red rag to any taxman.

The boat is in the UK. It is VAT paid in the EU. No doubt the bank is dealing with the winding up of the company in Jersey if that is necessary. The bank has already prepared a Bill of Sale stating (as usual) that the boat is free of any charges. The only outstanding question is whether the boat has spent significant time out of the EU since the IVA was paid as this might then involve Returned Goods Relief.

Good example of knowing the exact circumstances (much of which is in the OP). While all the things you suggested might be an issue in other circumstances, they do not apply here. In fact apart from checking that the IVA payment is correct and resolving the returned goods issue, this could not be more straightforward. One owner from new, registered on a recognised register and sale being executed by a major bank. The Jersey connection is sort of irrelevant. There is nothing illegal about a UK citizen owning a company in Jersey, nor that company owning a boat. VAT and ownership/title are not connected with VAT payment.

At the time the boat was built, buying a new boat to go world cruising (or keeping outside the EU) using the sailaway scheme to avoid paying UK VAT was popular, and although now more restrictive is still possible. If the owner then wanted to bring it into the EU VAT was due on the written down value - probably less than 50% of original cost and the boat is then in exactly the same status as any other EU VAT paid boat. I did a similar thing when I bought my last boat. It was formally owned by a Greek company and because it was chartered out no VAT was paid. When chartering finished the Greek company transferred title to me and I paid VAT on the written down value to keep it in the EU.

 

[jfm]

Crikey this is one helluva mixed up thread. It will sit on ybw's server for years but if anyone reading it in the future is considering relying on it, please don't.