Effects of Brexit on sailing under UK flag?

[HelloBoat]

Hello all,

Been lurking on this forum for a while now and figured I might as well sign up and participate

I have a question in regards to the Brexit and flying the UK flag.

I am currently considering buying a boat. I am a European living in the US for work atm, but I have no intention of flying the US flag.
So my plan was to open a UK Limited company and register the boat there.

Now I am wondering with the Brexit coming up, does that mean that the UK flag will be treated as outside EU and thus you have to get a TA (Temporary Admission) exemption and leave every 18 months? For me that won't be a huge issue doing so, I am just wondering and trying to gather all facts before I decide which flag to sail under.

Thanks!

 

[RupertW]

Your guess is as good as mine - and I doubt our government has thought about it let alone deciding what it wants.

 

[macd]

Now I am wondering with the Brexit coming up, does that mean that the UK flag will be treated as outside EU and thus you have to get a TA (Temporary Admission) exemption and leave every 18 months? For me that won't be a huge issue doing so, I am just wondering and trying to gather all facts before I decide which flag to sail under.

It may, although as RupertW wrote, no-one knows for sure. Flag state is actually a lesser factor in determining the 'nationality' of a leisure craft than the country of residence ("establishment" in much of the official jargon) of the owner.

 

[Kukri]

Oddly enough I can offer half an answer following a conversation with the Parliamentary Under Secretary for Transport.

She told me that nothing will change before the end of 2020.

Since the yacht register is a nice little earner, I expect that the system that you are planning to use will remain in place. Form a UK company and register the boat as owned by the company.

I think that your second paragraph is likely to be correct but I can confirm that the Minister admitted that the issue has not been raised yet.

 

[macd]

SHe told me that nothing will change before the end of2. 20

Is that UK time or CEST?

 

[RupertW]

Oddly enough I can offer half an answer following a conversation with the Parliamentary Under Secretary for Transport.

SHe told me that nothing will change before the end of 2020.

Since the yacht register is a nice little earner, I expect that the system that you are planning to use will remain in place. Form a UK company and register the boat as owned by the company.

True only if there is a deal so the transition period agreement stands - if no deal then all bets are off. I’m not even sure whether my planned Irish citizenship will allow me to keep my boat in the EU as they don’t have an SSR equivalent.

 

[colind3782]

This question has been asked on the forums many times since, oh, about June last year! The consensus is that no-one knows.

 

[macd]

True only if there is a deal so the transition period agreement stands - if no deal then all bets are off. I’m not even sure whether my planned Irish citizenship will allow me to keep my boat in the EU as they don’t have an SSR equivalent.

I presume you're relying on your proposed dual (I presume) citizenship allowing you freedom of EU movement. It's likely that your boat, whatever its flag, will be a "third country" boat since you are established in the UK. If so, it will be eligible for Ti. Alternatively, there's a possibility of a grandfathering VAT/duty arrangement for existing craft. Clearly no one (including offficials at the DoT) knows, but you have more options open than most.

 

[Tranona]

Just to confirm, whatever happens to UK after Brexit, the EU will not change as far as the TA system is concerned. To use it you have to be resident outside the EU, and crucially for you the boat must be registered outside the EU. So, currently you would not be able to use the UK register and still use TA, but nobody knows whether the UK will be treated as a "third country". Government policy is to try and avoid that in a general sense, although the actual treatment of the UK register is probably rather low down on the list of problems.

From a practical viewpoint, registering a boat in the US on the UK register may prove problematic. If it is an existing boat you will need to establish title going back at least 5 years and have a tonnage survey. With a new boat this is potentially easier, but would make sense to buy a European boat as you will not be able to sell a US built/sourced boat in the EU if your plans change as getting it to comply with the RCD is usually either not possible or not economic.

 

[Kukri]

From a practical viewpoint, registering a boat in the US on the UK register may prove problematic. If it is an existing boat you will need to establish title going back at least 5 years and have a tonnage survey. With a new boat this is potentially easier, but would make sense to buy a European boat as you will not be able to sell a US built/sourced boat in the EU if your plans change as getting it to comply with the RCD is usually either not possible or not economic.

Depends on where the boat is registered now.

 

[Tranona]

Depends on where the boat is registered now.

What does? How does current registration affect the process (assuming it is removed from the existing register).

 

[sailaboutvic]

I understood it to be the owner/crew not the boat that would have a problem.
The boat as long as its VAT paid it can stay .
All this talk about VAT paid may not be valid ,
I can't see VAT paid in any country that was part of the EU at the time how they can now undo that , part of that tax would had went to the EU , tho the payment country's make to the EU .

 

[lw395]

Hello all,

Been lurking on this forum for a while now and figured I might as well sign up and participate

I have a question in regards to the Brexit and flying the UK flag.

I am currently considering buying a boat. I am a European living in the US for work atm, but I have no intention of flying the US flag.
So my plan was to open a UK Limited company and register the boat there.

Now I am wondering with the Brexit coming up, does that mean that the UK flag will be treated as outside EU and thus you have to get a TA (Temporary Admission) exemption and leave every 18 months? For me that won't be a huge issue doing so, I am just wondering and trying to gather all facts before I decide which flag to sail under.

Thanks!

If you are thinking of buying your boat while you are US resident, you should understand the VAT implications on importing it to the EU.
Maybe registration in a different state entirely could work well?
It's not for nothing lots of yachts a registered in certain islands...

When someone settles in the EU it's often possible to import personal yachts without a VAT bill, apparently.

 

[lw395]

I understood it to be the owner/crew not the boat that would have a problem.
The boat as long as its VAT paid it can stay .
All this talk about VAT paid may not be valid ,
I can't see VAT paid in any country that was part of the EU at the time how they can now undo that , part of that tax would had went to the EU , tho the payment country's make to the EU .

IT's called leaving the EU and taking your yachts with you.
There's really no such thing as a 'VAT paid boat', it's shorthand for a boat which is legally permanently in the EU.

 

[macd]

I understood it to be the owner/crew not the boat that would have a problem.
The boat as long as its VAT paid it can stay .
All this talk about VAT paid may not be valid ,
I can't see VAT paid in any country that was part of the EU at the time how they can now undo that , part of that tax would had went to the EU , tho the payment country's make to the EU .

I think that's highly likely, Vic, for craft already in the EU28 immediately prior to efective Brexit day. Or possibly in the EU27 on the same day. Who knows?
The OP writes that he's a "European"...ambiguous but probably EU27. If so, he'll personally enjoyfull freedom of movement.

 

[Kukri]

What does? How does current registration affect the process (assuming it is removed from the existing register).

Very simple. A transfer from another nation grounds a new title so far as the UK Part one Register is concerned. Just provide the Certificate of Deletion and the Bill of Sale and arrange a tonnage measurement survey.

 

[macd]

Very simple. A transfer from another nation grounds a new title so far as the UK Part one Register is concerned. Just provide the Certificate of Deletion and the Bill of Sale and arrange a tonnage measurement survey.

Regardless of Brexit, are you suggesting that a simply change of flag from one country to another (cost as little as £25) is going to change a boat's VAT position (cost typically many thousands of £)? Because if it did, it would already be happening on an industrial scale.

 

[sailaboutvic]

I think that's highly likely, Vic, for craft already in the EU28 immediately prior to efective Brexit day. Or possibly in the EU27 on the same day. Who knows?
The OP writes that he's a "European"...ambiguous but probably EU27. If so, he'll personally enjoyfull freedom of movement.

Ya I went off track a bit , was referring to Brits flag boat in the used in the EU after we leave and the owners , should had kept on track with the OP question

 

[Kukri]

No. It would have no effect at all on the VAT position. I am talking about the title, not the tax position. Whether VAT is due is an entirely separate issue.

 

[macd]

No. It would have no effect at all on the VAT position. I am talking about the title, not the tax position. Whether VAT is due is an entirely separate issue.

Thanks. Understood and agreed.
The OP's case (or presumed case: EU27 citizen, US resident) is somewhat unusual, but it's worth repeating: owner's country of residence trumps everything in determining whether a vessel is an "EU craft" and thereby eligible or not for TI. The notion that simply changing flag renders it tax-paid when it wasn't before is simply absurd.