Creating an LLC before boat purchase

[Sailing_Journey]

Hi there,

About to close on a Baba 30, but have questions about LLC incorporation. I want to protect the boat from any judgments from debt collectors putting liens on it (no such judgments now, but just in case), reduce liability, and increase privacy. Total cost is around 350 USD, so not bad, but just curious if anyone has done this process. I also need a Tax ID number, and need a business created anyway.

My question pertains to the purchase process, and how much of a pain it is to maintain business status versus just having personal ownership. I also heard there are tax right offs? Has anyone done this to protect their privacy, and if so, did you do it before purchase, or did you transfer from personal ownership? If you transferred from personal ownership, wouldn't that leave a paper trail so that entities could find who owns the LLC anyway? What are the pros and cons of doing this versus private ownership? Just want to hear from those with real-world experience doing the process.

Philip

 

[PlanB]

As per the reply to your other post, you will get proper answers from a US forum, we are mostly Brits/Europeans.

 

[Sailing_Journey]

Did not know that. Thanks all! I went and posted the question on Sailing Anarchy.

 

[EisReg]

I see it's been a while since this was posted, but I'm curious if anyone had follow-up experiences using an LLC for boat ownership, especially for non-US residents?

Did it end up helping with liability or registration issues? I'm looking into a similar setup and wondering what surprises might come up down the road. Would love to hear how things panned out for those who tried it.

 

[EisReg]

I also looked into this for a similar setup last year, and one thing that tripped me up was needing to register for self-assessment even with a UK-based LLC. HMRC expects it once you start generating any kind of income or if your setup includes things like director's salary or dividends. Here's where you can find more info - it helped me sort out what applied to my case.

 

[MoodySabre]

I also looked into this for a similar setup last year, and one thing that tripped me up was needing to register for self-assessment even with a UK-based LLC. HMRC expects it once you start generating any kind of income or if your setup includes things like director's salary or dividends. Here's where you can find more info - it helped me sort out what applied to my case.

In the UK you will get taxed on a benefit in kind for the private use (however small) of a boat registered by you through a company. My initial thought is wondering what you are trying to protect your boat from? Are your affairs that flaky?

 

[Tranona]

That is not strictly true unless the boat is owned as a business asset. Many boats are owned by a company as it can make it easier to register as a British Ship on Part 1, or to register in the Channel Islands. In this case the only asset of the company and it does not trade. The benefit issue comes in when the company's business activities include operating the boat for profit, and VAT on purchase and running costs has been treated as an input. Any private use would be treated as a benefit in kind to the user.

However the original question was US orientated where there are advantages in owning the boat through a company, again either to get registration (in Delaware for example) or to keep the boat separate from personal assets as the OP suggests

 

[WindyWindyWindy]

Well, I do this as the boat is actually commercial in Spain. We're now UK flagged (Brexit creates all sorts of entertainment) and that requires that you produce an SCV certificate for a commercial reg, at least at the point of registration, possibly renewal as well but they aren't currently asking for it every year at least.