Leasing: What does this mean?

[Laser310]

From a Listing:

"French flag, EU VAT paid, French leasing to continue (for European customers - short). "

2018 Garcia Exploration 45 Cutter for sale - YachtWorld

it's at the bottom.

I am guessing that the yacht is technically owned by a business (presumably set up by the owner) and leased back to him. The listing says the boat has never been chartered.

presumably for some financial advantage - probably taxes.., but maybe something else..?

I note that it is listed as VAT paid.

can anyone provide more details about what might be going on here?

i guess the new buyer will have to buy the business or whatever owns the boat - so it is not an offer to finance the boat - right?

 

[DownWest]

Local friend bought an Amel 55 on a 'leasing' scheme. Saves on VAT and spreads the cost. Not sure of the detail, but a sort of tax dodge that is not looked at as it sells nice nice yachts for the French builders.

 

[Sandy]

Only 3000 mm a year?

 

[Frogmogman]

presumably for some financial advantage - probably taxes.., but maybe something else..?

I note that it is listed as VAT paid.

This has been a very popular way of financing an ocean going yacht in France (and in Italy I believe), as it allowed for VAT to be paid at 10% instead of 20% . It also meant that in terms of the French wealth tax, the yacht would be perceived as a liability rather than an asset.

As I already pointed out in a previous post, in the "Oyster on the up" thread, following a European Court ruling, the VAT loophole has been closed as of 30th March of this year (but still applies to existing contracts).

"The justification for the 50% discount on VAT was that an ocean going yacht could spend half of it’s life outside EU waters. The court decided that this was clearly not the case for most of the boats in question.
Now, if you were to buy such a boat, you could apply for relief on TVA on the lease payments for those periods that the boat is actually outside out of EU waters, but the general half-price deal is finished".

The impot sur la fortune wealth tax has also been shaken up by Macron, so I think this advantage has pretty much disappeared too, so all in all I expect it will become a much less popular way of financing a yacht in France.

It would still be attractive if your plan was to build and equip a yacht for, say a voyage down to Australia with a view to selling the boat down under. You could pay nothing in VAT on the lease all the time you are outside of EU waters, and would be able to sell the boat VAT free at the other end.

In response to your last question, it's nothing as complicated as taking on a business. It is a straightforward transfer of the lease finance (if the buyer wished to do that).