French leasing

[Whitelighter]

Looking at a number of boats in France and quite a lot of them state that 'leasing can be taken over' although they also list a full purchase price inc vat.

As a non french citizen/resident can I take over the French leading and move the boat or can I only buy outright?

 

[jfm]

In principle you can take it over. Plenty of Brits use the scheme. Obviously the bank would have to be happy with you as a borrower. The boats are usually French flAgged and need to stay that way till the lease is finished.

Moving the boat is more complex. It usually needs to be in France on termination of the lease, for vat reasons

 

[Whitelighter]

Ok, but I assume it can go elsewhere in Europe during the lease period?

Is there any advantage to taking on the lease (vat saving, interest rate etc) or An I better just getting a marine mortgage and paying the cash price.

Boats are all small fry, €70k-€100k in value, 8m-11m in size

 

[jfm]

Yes it can move around in Europe while in the lease, except that uk hmrc are on the record as not accepting the vat idea works during the lease term ( they are ok once lease has finished)so you be gambling a bit if you bring it to uk. I can't comment on the pricing. You'd need to see what financing terms the French bank offers you to continue the lease versus what a uk lender will offer you. That will give you your answer.

If the boat is now worth 100k and the terminal payment on the lease at full maturity is 1k then if you continue French leasing you save vat of 99k x the difference between the normal French 20% versus the leasing rate of about 10% so there is 10k of vat saving up for grabs. I suspect much of that will land in pockets other than yours though

 

[Deleted User YDKXO]

Is there any advantage to taking on the lease (vat saving, interest rate etc) or An I better just getting a marine mortgage and paying the cash price.

I looked at a few boats with leasing schemes in Italy before I bought my current one and there seemed to be no issue with taking over the lease as a Brit. I asked the same question as you did about moving the boat out of Italy and I was told by the broker that it wouldn't be a problem but I wasn't so sure. How can the leasing co repossess a boat if its another country; indeed how could they even find it? Anyway I didn't look further into it because the interest rates attached to these leases seemed quite high to me, like 8-9%. I may be wrong on this but as far as I understood it, the boat is considered VAT paid at the end of the agreement

 

[Whitelighter]

Hmm. Doesnt sound like a massive saving can be had for me plus I run the risk of a chat with the revenue.

Thanks for the info

 

[jfm]

Yup mike that's what I meant about vat saving land in other peeOple pockets

 

[RogerRat]

Phew!

From the title, I thought this thread was gonna be a bit 'Tongue' in cheek...

French and finance, worst nightmare with no tax savings. :ambivalence:

RR