One for the legal minds

[ongolo]

One day I am going to die. I will probably still be on my boat possibly in a country where I dont know the laws as far as estates, taxes and the procedures for the execution of my estate, I might no even be able to speak the local lingo.

The same goes for my wife.

If any one fo us dies, we dont want to be in the position to lose the boat because of some estate tax etc.

So what is the international law when a boat owner dies and leaves some assets?

Maybe I am seeing ghosts? Maybe the laws where the boat is registered are applicable?

Anybody any idea? Dont think that is a problem for me only. And I dont live in the EU and I will most likely never go there. So I would like to get advice how such a case is handled according to marine or international law.

Obviously we have a will.

thanks ongolo


<hr width=100% size=1>1000 dream about it, 100 talk about it, 10 start and 1 completes it<P ID="edit"><FONT SIZE=-1>Edited by ongolo on 22/05/2004 13:51 (server time).</FONT></P>

 

[Mirelle]

A shot at an answer

I'm not a lawyer. But I do buy, sell and operate merchant ships for a living.

A vessel, be she yacht or ship, is subject to the laws of her own flag at all times, and to the laws of the nation, if any, whose territorial waters she happens to be in as well. But legally a vessel is regarded as a small piece of the territory of her flag state, which has so to speak broken off and floated away.

Now, let us assume, for the sake of argument, that you are French, you boat is French and you kick the bucket when the boat is in, say, Durban. Your estate, being that of a French citizen, falls to be dealt with under French law, not South African law, so you pay estate duty as a Frenchman. If this results in the boat having to be sold to meet the tax bill, that is theoretically what happens. But there is a bright side to this - the French tax man is most unlikely to get involved in arresting a boat and selling her through the Courts in South Africa; he is infinitely more likely to wait for your widow to make it home to France.

South Africa has no interest in the French tax affairs of non-citizens and cannot impose death duties on a non-citizen just because he pegs out in SA.

So in practice your widow is safe.

<hr width=100% size=1>Que scais-je?

 

[ongolo]

Re: A shot at an answer

Mirelle,

I thank you very much. I had the suspicion or hope it might be like this.

You put my mind at ease.

And the taxman at home can go hopping, he want know.

regards ongolo


<hr width=100% size=1>So what......... it floats

 

[Sybarite]

Re: A shot at an answer

I think I have to disagree with you on this one. I think that the ship's flag is irrelevant. Incidence to tax laws usually depends on where you are ordinarily resident. I am an Irish citizen, a British subject and a French resident. My boat is registered in France but wears a red ensign. Unless I officially leave France, it's there that I would expect to pay death duties... if ever I can attain the threshhold...

John.

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[Mike21]

In UK there is no inheritance tax on assets transferred to spouses, Italy has abolished death duties completely.
Would have thought the country of residence laws would apply, but could be completely wrong


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[l'escargot]

When my father died in France (but in his mobile home, not a boat) his estate was dealt with under UK law. He was a UK national and his will was here. The French weren't even bothered about issuing a death certificate.

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[MainlySteam]

Re: A shot at an answer

Again, I am not a tax lawyer but have had some dealings in the matter. For transients I believe that Mirelle is exactly right. But if you are a tax resident of the country you die in (that is not the same thing as being resident) then your personal tax affairs will be dealt with in that country even though your boat is flagged in another.

In most western jurisdictions it is much harder to lose the tax residency of the country you last lived/worked in than it is to gain tax residency in another - there are usually quite long residency (abode type residency) requirements in the other country (usually the greater part of a year) with only limited days of return in any year to the original country of tax residency and no evidence of remaining domestic arrangements in it ie a domestic house which you still use for ones self. On top of all that, if one has resided in a country long enough to be a tax resident then one almost certainly has had to import ones pleasure vessel into that country and have paid import taxes/duties, if any, on in although it can have retained its flag.

So, if you die in a country that has an interest in your tax affairs one can assume that that is your chosen place of tax residency and that you are therefore happy to have your personal tax affairs settled in it. So again Mirelle's answer is essentially correct in my view even for non transients. It is important to realise that there is a distiction between residency and tax residency, they are not the same thing.

I have no idea how it works amongst the EU countries but that is irrelevant to the original poster's question I believe.

John



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[cliff]

Re: A shot at an answer

"I thank you very much. I had the suspicion or hope it might be like this.
You put my mind at ease.
<font color=red>And the taxman at home can go hopping, he want (won't?) know.</font color=red>
regards ongolo"


First a death certificate will be required from the authorities in who's territorial waters the death occured or where reported. That is unless you stitch the body in an old sail , last stitch through the nose of course, and consign the remains to the deep - not recommended.

The local authorities have to notify your local embassy / consular office and so your tax man will know.

Under UK law, and assuming you are a UK citizen, unless you emigrate your domicile is generally taken as UK.

You can be classed as NOR (Not Ordinarily Resident) for (income) tax purposes under certain circumstances as I have been for the last 25years and indeed still am, however my "estate" still falls under UK law.

Depending on when you left the UK and how long you have been away and how long, and when, you have been back will dictate you NOR status.

The subject is very complex amd I suspect the law concerning merchant seamen and pleasure/leisure sailors will be different.

If you are worried I would strongly suggest you seek professional legal advice as it is too late after the event to find out if you had filled in a particular form you would have been covered or if you still had property in the UK you were covered or there is some registration required beforehand.

I have had personal experience of the death in a foriegn country of a collegue and this estate was settled in the U.K.. The oonly payment in country of death was for the death certificate and the transportation of his remains back to the U.K. The local Embassy was most helpful (for a change) with the arrangements and dealing with the local authorities.



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[qsiv]

Re: A shot at an answer

I suspect Mirrelle was assuming 'registered' and 'flagged' to be one and the same - which indeed they are for a commercially operated vessel - and I would also expect to be the case in the circumstances mentioned.

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[Birdseye]

Re: A shot at an answer

Again I am not an expert, and if you want definitive advice on which you can rely, you should go to one (and pay for it).

I believe that the basic rules are that income tax depends on where you are "ordinarily resident" whilst inheritance taxes depend on your "domicile". The first you can change quite easily, and many people who live more than half the year in a foreign country have done so. They are still Brit citizens.

Changing domicile is more difficult. You have to convince the Revenue that you have permanently abandoned the UK as a place of residence, cut most all ties, and gone to live permanently abroad in one other country where you have settled. In this case, I do not think you would be entitled to register your boat in the UK. You might well not be able to do so in the first case either.

If you are living on a UK flagged vessel and moving from country to country regularly, I dont see how either of the above can apply. You will most likely remain liable to UK taxes.

But the difficult bit is how some foreign jurisdiction will deal with their side of things. International law and treaty interpretation is not the same in each country. If you were just passing through you would be unlucky to have problems, but not impossible. If you had stayed in a country for some time, it could well be more difficult. And no one can give you a simple answer since the rules will vary according to where you are and how long you've been there. See the current furore about Spanish tax on foreign boats to illustrate. The Lord alone knows what would happen in some currupt thrid world jurisdiction.

In short, if you want certainty, stay in the UK. If you want the interest and excitement of foreign cultures and places, then there is a flip side in not knowing the rules of the local game



<hr width=100% size=1>this post is a personal opinion, and you should not base your actions on it.

 

[Sybarite]

Re: A shot at an answer

" In this case, I do not think you would be entitled to register your boat in the UK. You might well not be able to do so in the first case either."

This goes against EU rules and that is why so many French people are re-registering their boats in Belgium ie to get round the very restrictive rules in France.

John


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[mirabriani]

H"mm this has turned into a complicated but interesting thread.
I am wondering what the best scenario would be if I wished to base myself in europe but as a liveaboard, do some part time work (say carpentry) in whatever country I happened to be in. In addition I might wish to invest some capital in property in order to provide an income.
Up to now I had assumed that England would be the place to have my investment property, because I know the market, the law and I only speak English.
However markets change and it might be better to consider, say, Italy (with no inheritance tax) if I found the market suitable.
Any thoughts?
Regards Briani

<hr width=100% size=1><P ID="edit"><FONT SIZE=-1>Edited by mirabriani on 23/05/2004 19:32 (server time).</FONT></P>

 

[ongolo]

Re: A shot at an answer

Well I got answers to questions I did not ask. Many here make the mistake to assume that every country is as regulated as the UK.

As far as notifying my embassy goes, that will be almost impossible in most cases.

And as far as the taxman goes, we have not heard from each other for 15 years or so. ))

So it appears Mirelle is right, I shall search for and get the appropriate laws, keep them on board for the day any confusion starts. These papers (duely stamped with meaningless stamps, as long as they are stamped) are often magic in other situations.

thanks for all the input.

regards ongolo


<hr width=100% size=1>So what......... it floats