HMRC U-turn on tax on returning boats

[Irish Rover]

I am UK citizen & resident with VAT paid boat on Greece (under SSR). Sounds like I will loose VAT status if I sail to Turkey for a week. Any ideas on how to retain VAT status (as it will have value to future EU resident buyer)?

Thanks
Andrew

It would be advisable t have your boat in the EU on 31 Dec but other than that there's no issue about you spending time in Turkey. Of course bear in mind Greece is not currently allowing entry of boats from Turkey so if you come here you may be waiting a long while to get back.

 

[Graham376]

On 31st Dec 20, one boat in the UK, the other in the EU, duel residency - plenty of wriggle room.

Which boat will change its name to match the other so it can appear to be in two places at the same time?

 

[andrewAB]

It would be advisable t have your boat in the EU on 31 Dec but other than that there's no issue about you spending time in Turkey. Of course bear in mind Greece is not currently allowing entry of boats from Turkey so if you come here you may be waiting a long while to get back.

My boat is in Greece and will remain there until mid 2021. I was thinking about what may happen with a non-EU resident loosing EU VAT ststus on the boat if I ever leave the EU and wish to retrun soon after. Would I still get EU return of goods exemption even if I am non EU resident?

 

[Graham376]

My boat is in Greece and will remain there until mid 2021. I was thinking about what may happen with a non-EU resident loosing EU VAT ststus on the boat if I ever leave the EU and wish to retrun soon after. Would I still get EU return of goods exemption even if I am non EU resident?

No, you would have to pay VAT/Duty as RGR only applies to residents.

 

[nortada]

Which boat will change its name to match the other so it can appear to be in two places at the same time?

Both boats could have both names.? A technique employed by the Soviet Navy during the Cold War.?

A bit of mix n’ match for maximum confusion and flexibility.?

Then there is dual residency .?

God, don’t know about anybody else, but I’m getting confused.?

As I have no intention of relocating either vessel, none of this will ever happen,.?

 

[Irish Rover]

No, you would have to pay VAT/Duty as RGR only applies to residents.

Would you have a link that confirms RGR is only available to EU residents. From my reading that doesn't appear to be the case and it's available if the person exporting and re-importing is one and the same.
I practical terms I'd be of the view that if andrewAB checks out in Greece and goes to Turkey for a few weeks or months and returns to the same Greek office with his paperwork no questions will be asked.

 

[Graham376]

Would you have a link that confirms RGR is only available to EU residents. From my reading that doesn't appear to be the case and it's available if the person exporting and re-importing is one and the same.
I practical terms I'd be of the view that if andrewAB checks out in Greece and goes to Turkey for a few weeks or months and returns to the same Greek office with his paperwork no questions will be asked.

I misread your post and concentrated on the RTR bit. One of the EU sites states that a resident who takes goods out and then brings them back can claim RGR but it doesn't cover short term export/import. OTOH I don't know why there should be any problem with a non resident taking a VAT paid boat based there outside the EU for a short period. What happens to third country residents whose boats are in EU now?

As I said in a previous post somewhere, there are so many permutations of people's situations, we'll just have to wait and see what rules come in to place as too many unknowns now.

 

[Irish Rover]

I misread your post and concentrated on the RTR bit. One of the EU sites states that a resident who takes goods out and then brings them back can claim RGR but it doesn't cover short term export/import. OTOH I don't know why there should be any problem with a non resident taking a VAT paid boat based there outside the EU for a short period. What happens to third country residents whose boats are in EU now?

As I said in a previous post somewhere, there are so many permutations of people's situations, we'll just have to wait and see what rules come in to place as too many unknowns now.

Thanks and just for Andrew's information it is my understanding that there would be no issue even if he stayed out for the full 3 year period envisaged by the regulations.

 

[Baggywrinkle]

No, you would have to pay VAT/Duty as RGR only applies to residents.

There is import duty waiver on personal goods when a non-EU citizen takes up residency in the EU.

Subject to Articles 4 to 11, personal property imported by natural persons transferring their normal place of residence from a third country to the customs territory of the Community shall be admitted free of import duties.

The following, in particular, shall constitute ‘personal property’:
(i) household effects;
(ii) cycles and motor cycles, private motor vehicles and their trailers, camping caravans, pleasure craft and private aeroplanes.

Article 4

The relief shall be limited to personal property which:
(a) except in special cases justified by the circumstances, has been in the possession of and, in the case of non-consumable goods, used by the person concerned at his former normal place of residence for a minimum of six months before the date on which he ceases to have his normal place of residence in the third country of departure;
(b) is intended to be used for the same purpose at his new normal place of residence. In addition, Member States may make relief conditional upon such property having borne, either in the country of origin or in the country of departure, the customs and/or fiscal charges to which it is normally liable.

Article 5

1. Relief may be granted only to persons whose normal place of residence has been outside the customs territory of the Community for a continuous period of at least 12 months.
2. However, the competent authorities may grant exceptions to the rule in paragraph 1, provided that the intention of the person concerned was clearly to reside outside the customs territory of the Community for a continuous period of at least 12 months.

Article 6

No relief shall be granted for:
(a) alcoholic products;
(b) tobacco or tobacco products;
(c) commercial means of transport;
(d) articles for use in the exercise of a trade or profession, other than portable instruments of the applied or liberal arts.

Article 7

1. Except in special cases, relief shall be granted only in respect of personal property entered for free circulation within 12 months from the date of establishment, by the person concerned, of his normal place of residence in the customs territory of the Community.
2. The personal property may be released for free circulation in several separate consignments within the period referred to in paragraph 1.

Article 8

1. Until 12 months have elapsed from the date on which its entry for free circulation was accepted, personal property which has been admitted duty-free may not be lent, given as security, hired out or transferred, whether for a consideration or free of charge, without prior notification to the competent authorities.
2. Any loan, giving as security, hiring out or transfer before the expiry of the period referred to in paragraph 1 shall entail payment of the relevant import duties on the property concerned, at the rate applying on the date of such loan, giving as security, hiring out or transfer, on the basis of the type of property and the customs value ascertained or accepted on that date by the competent authorities.

Article 9

1. By way of derogation from the first paragraph of Article 7, relief may be granted in respect of personal property entered for free circulation before the person concerned establishes his normal place of residence in the customs territory of the Community, provided that he undertakes actually to establish his normal place of residence there within a period of six months. Such undertaking shall be accompanied by a security, the form and amount of which shall be determined by the competent authorities.
2. Where use is made of the provisions of paragraph 1, the period laid down in Article 4(a) shall be calculated from the date on which the personal property is brought into the customs territory of the Community.

Article 10

1. Where, owing to occupational commitments, the person concerned leaves the third country where he had his normal place of residence without simultaneously establishing his normal place of residence in the customs territory of the Community, although having the intention of ultimately doing so, the competent authorities may authorise duty-free admission of the personal property which he transfers into the said territory for this purpose.
2. Duty-free admission of the personal property referred to in paragraph 1 shall be granted in accordance with the conditions laid down in Articles 3 to 8, on the understanding that:
(a) the periods laid down in Article 4(a) and the first paragraph of Article 7 shall be calculated from the date on which the personal property is brought into the customs territory of the Community;
(b) the period referred to in Article 8(1) shall be calculated from the date when the person concerned actually establishes his normal place of residence in the customs territory of the Community.
3. Duty-free admission shall also be subject to an undertaking from the person concerned that he will actually establish his normal place of residence in the customs territory of the Community within a period laid down by the competent authorities in keeping with the circumstances. The latter may require this undertaking to be accompanied by a security, the form and amount of which they shall determine.

Article 11

The competent authorities may derogate from Article 4(a) and (b), Article 6(c) and (d) and Article 8, when a person has to transfer his normal place of residence from a third country to the customs territory of the Community as a result of exceptional political circumstances.

https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:324:0023:0057:EN:PDF

So after 01.01.2021, any Brit taking residency in an EU country can bring their boat with them.

 

[Graham376]

So after 01.01.2021, any Brit taking residency in an EU country can bring their boat with them.

But remember they will be processed as third country citizens, not the easy routes we have now. Hopefully, once the EU get over their upset at our leaving, deals with individual countries may be done.

 

[Baggywrinkle]

But remember they will be processed as third country citizens, not the easy routes we have now. Hopefully, once the EU get over their upset at our leaving, deals with individual countries may be done.

The EU is a pragmatic organisation .... there is no upset, but there is a system in place already for 3rd countries.

The UK voted to become a 3rd country, and Boris seems to be going for total independence from anything EU - so 3rd country we are going to be for the foreseeable future IMO.

Rules about VAT and travel for the small percentage of the UK population with either property or boats in the EU will be so far down the priority list for negotiation, it will years before anything beneficial comes out of it at EU level. Most of the EU states that have significant numbers of UK citizens are sorting out the ones already there and any newcomers after mid 2021 will simply be processed as 3rd country citizens under existing 3rd country rules.

Like the Brexit voters said, we used to work and travel abroad before the EU, and we do in the rest of the world, so what's the problem? The problem, as remainers already knew, is that there will be nothing that works as easily and effectively as EU FoM ... we'd better just get used to having no FoM any more.

 

[andrewAB]

Thanks for the responses!
I found the following link on the RYA pages and I meet all the 4 criteria so it looks like I will be free to leave and return to the EU (within 3 years) without loosing the boats EU VAT paid status. This will all me to do the 90/180 day Schengen shuffle between Greece over the summer Turkey also. Yeah!

EU Commission confirms RYA thinking on Returned Goods Relief

"In summary, in order to be entitled to relief from VAT and, if applicable, import duty on arrival in the customs territory of the European Union (commonly called returned goods relief – or RGR) a recreational craft must:

1. have had Union status when it was taken out of the EU; and
2. have been exported from the EU by the same person as is importing it; and
3. be in the same condition as when it was exported; and
4. return within 3 years of export.

The result is that boat owners usually move seemingly seamlessly in and out of the EU, irrespective of the boat’s flag state, the nationality of the owner, or the Member State in which the VAT (and, if applicable, import duty) were accounted for."

 

[Chris_Robb]

ToR or RGR
I have been using ToR incorrectly. It is used for a different category of returning goods. I have received this from the Customs Brokers Sea Avia, also thanks to MacD of this parish.

Yes so ToR (Transfer of Residence) is for exactly that - a private individual transferring their residence to the UK and is for someone who has been out of the UK for a period of 12 months. ToR relief will still apply for qualifying individuals. RGR (Returned Goods Relief) is for those who are UK companies or individual living in the UK who are bringing their previously exported goods back to the UK.

The actual requirements are very similar - just for a different group of people.
Andrew - glad you got their in the end!

You talk about going between Turkey and Greece to extend your time. I have used this argument with the Greek Tourist board to warn them that a lot of yachts will do this - and are more likely to use the Turkish yards to overwinter as the repair expertise is very good...... I recon we will have 180 days visa with Greece unilaterally if we dont get it in the final agreement. Once Greece gives it to us - the other Med countries will join them....

 

[nortada]

ToR or RGR
I have been using ToR incorrectly. It is used for a different category of returning goods. I have received this from the Customs Brokers Sea Avia, also thanks to MacD of this parish.

Yes so ToR (Transfer of Residence) is for exactly that - a private individual transferring their residence to the UK and is for someone who has been out of the UK for a period of 12 months. ToR relief will still apply for qualifying individuals. RGR (Returned Goods Relief) is for those who are UK companies or individual living in the UK who are bringing their previously exported goods back to the UK.

The actual requirements are very similar - just for a different group of people.
Andrew - glad you got their in the end!

You talk about going between Turkey and Greece to extend your time. I have used this argument with the Greek Tourist board to warn them that a lot of yachts will do this - and are more likely to use the Turkish yards to overwinter as the repair expertise is very good...... I recon we will have 180 days visa with Greece unilaterally if we dont get it in the final agreement. Once Greece gives it to us - the other Med countries will join them....

And Portugal.

 

[Chris_Robb]

And Portugal.

Of course, they are competitors!

 

[GTom]

I am UK citizen & resident with VAT paid boat on Greece (under SSR). Sounds like I will loose VAT status if I sail to Turkey for a week. Any ideas on how to retain VAT status (as it will have value to future EU resident buyer)?

Thanks
Andrew

Simple, don't be in Turkey or anywhere else, that doesn't belong to the EU VAT area on 31.12.2020.

 

[sailaboutvic]

Both boats could have both names.? A technique employed by the Soviet Navy during the Cold War.?

A bit of mix n’ match for maximum confusion and flexibility.?

Then there is dual residency .?

God, don’t know about anybody else, but I’m getting confused.?

As I have no intention of relocating either vessel, none of this will ever happen,.?

Be careful what you write you end up with a slap wrist .

 

[sailaboutvic]

Are YOU going to tune into the RYA webiner this afternoon?

 

[nortada]

Both boats could have both names.? A technique employed by the Soviet Navy during the Cold War.?

A bit of mix n’ match for maximum confusion and flexibility.?

Then there is dual residency .?

God, don’t know about anybody else, but I’m getting confused.?

As I have no intention of relocating either vessel, none of this will ever happen,.?

Be careful what you write you end up with a slap wrist .

Why and by whom

 

[Chris_Robb]

Are YOU going to tune into the RYA webiner this afternoon?

When is it on? Load of rubbish last time with scare mongering...... can you heckle them?