monaco registered boat

[meracus]

hello
what are the real evidence that a boat has vat paid when Monaco registered
do they have a different sheet, paper that explicitly states that the vat has been paid, can you ask for an "HMRC" type declaration
on the bill of sale ..... it says that a leasing company sold it to x ...... but absolutely no mention of vat /tax / etc
help please

 

[Tranona]

There is no such thing as an "HMRC declaration".

It is up to the seller to provide evidence that there are no outstanding VAT issues on the boat. if he is unable to do this, then probably best to walk away.

 

[KINGFISHER 9]

If the boat had belonged to a leasing company, as a business, I'd have thought its VAT wouldn't have been paid.

 

[meracus]

leasing company first then onto an italian owner then onto the current owner

 

[Nick_H]

It probably means the Italian owner purchased it using a VAT mitigation scheme which are common in Italy and France, whereby he would lease it for a number of years then buy it outright for a small residual cost. The tax advantage is due to the Fr/It tax authorities accepting that the boat would spend a percentage of its time outside the EU, and therefore charging a lower VAT rate on the leasing payments. I seem to remember that HMRC don't accept the validity of these schemes, but I'm not sure on that and I certainly don't remember the details.

 

[meracus]

how would that translate into registering the boat in the united kingdom .... and laying in mallorca ?

 

[Tranona]

how would that translate into registering the boat in the united kingdom .... and laying in mallorca ?

Nothing to do with registration which is unconnected to whether VAT is paid or not.

VAT is the responsibility of the state where the transaction takes place and the nature of the transaction. The sting is that you need to be able to show that VAT has been paid when it was due in order to move the boat freely around the EU. So if the boat was bought in Italy then the transaction would be the responsibility of the Italian customs, but if you moved to Spain the authorities there have the right to make you pay VAT if you are unable to show that the boat is VAT paid. It is irrelevant where you live or where the boat is registered.

Although the likelihood of that happening is probably very small, the consequences can be extreme, not just the financial cost of paying the tax, but the hassle that goes with it. As the boat seems to have a less than straightforward history it would make sense to have evidence that for each transaction that involved the boat, VAT was accounted for correctly. As suggested if it was bought through a lease scheme, even if it is of the type that is not acceptable in the UK, there should be evidence that VAT was properly accounted for under the Italian rules. If the sale from the second owner after the leasing company was between two private people in the EU then no VAT would be due, so it is the documentation for the first transaction from the leasing company that you need to see.

 

[jfm]

It probably means the Italian owner purchased it using a VAT mitigation scheme which are common in Italy and France, whereby he would lease it for a number of years then buy it outright for a small residual cost. The tax advantage is due to the Fr/It tax authorities accepting that the boat would spend a percentage of its time outside the EU, and therefore charging a lower VAT rate on the leasing payments. I seem to remember that HMRC don't accept the validity of these schemes, but I'm not sure on that and I certainly don't remember the details.

Nick, the "standard" leases in France, Italy, Malta etc are not the ones UK HMRC was referring to when it said it didn't accept validity. The boat in this case probably has just a standard Italian lease, which is perfectly fine, if the documentation is available. I don't think that MC woud accept the boat onto its register unless the VAT position was acceptable to them

 

[MapisM]

Precisely what I thought when I read the OP and the following replies.
I refrained from commenting because I wasn't 100% positive about that, but thanks for confirming that my senility is not progressing too fast... :encouragement:

 

[Nick_H]

Nick, the "standard" leases in France, Italy, Malta etc are not the ones UK HMRC was referring to when it said it didn't accept validity. The boat in this case probably has just a standard Italian lease, which is perfectly fine, if the documentation is available. I don't think that MC woud accept the boat onto its register unless the VAT position was acceptable to them

Ah right, I didn't realise there was another type of leasing scheme, thanks for clarifying (oh, and thanks for helping the guy returning my tabletop btw)