Ownership entity question

[tonyh1]

I have never bought and registered a boat in the UK and would like to call on the collective wisdom of those who have...

Do all boats have to be registered?
Is it normal to own/register in your own name or can a Ltd Company own it?
Can a foreign person or foreign company own a UK registered boat?

Bottom line is that I am toying with the idea of my US Company buying a boat here in the UK and I just want to know the implications here in the UK.

Thanks in advance.

 

[Stork_III]

I have never bought and registered a boat in the UK and would like to call on the collective wisdom of those who have...

Do all boats have to be registered?
Is it normal to own/register in your own name or can a Ltd Company own it?
Can a foreign person or foreign company own a UK registered boat?

Bottom line is that I am toying with the idea of my US Company buying a boat here in the UK and I just want to know the implications here in the UK.

Thanks in advance.

Companies can't register on the small ship'sregister (part 3)

Rules for Part 1 are here http://www.yachtsurveyors.co.uk/marine-surveying/yacht-surveying/how-do-i-register-my-vessel/ . So it appears an american co could not register on british register.

 

[jfm]

I have never bought and registered a boat in the UK and would like to call on the collective wisdom of those who have...

Do all boats have to be registered?
Is it normal to own/register in your own name or can a Ltd Company own it?
Can a foreign person or foreign company own a UK registered boat?

Bottom line is that I am toying with the idea of my US Company buying a boat here in the UK and I just want to know the implications here in the UK.

Thanks in advance.

No, under UK law boats don't have to be registered. but under some no UK laws they do, so unless you confine your boating to UK waters it makes sense to register.

We have 2 registers in uk, so called "part 1", and "part 3" aka SSR. Only part 1 is comparable to a full register of the type you see in other developed countries. Part 3 is much lighter weight thing and doesn't record legal title, etc, but it does fulfil the non UK law point in the preceding paragraph so is a convenient and cheap fix for UK boaters who want to cross to, say, France. In fact that's why the register was created.

Only natural persons, not companies, can be registered as owner on part 3 but I'll leave part 3 discussion there because as I say it is hardly a real register.

On the main or "proper" part 1 register, only UK or other EU persons can register, but non natural persons ie companies can register and that is quite normal/not unusual. Your US company may not register as it is non EU. It could set up a EU subsidiary to register or you could set up an EU company to register, and if you did either of those 2 things I'd suggest a UK company for ease of administration. The EU subsidiary/company could, in addition, be a mere trustee under a bare grantor trust so that the US company retains beneficial ownership, if you wish. Otherwise, or as well as that, the EU company could elect disregarded status on form 8832 (aka "check-the-box").

Because of all that, the US tax position for you if you use an EU company can be identical with the postion that would have prevailed if the US company had registered the boat itself.

All that said, I'm answering your question without actually knowing what the question is. If you just want to sail from UK to France, then use the part 3 SSR register and register in your own personal name. Easy peasy, online. If one factor for you is that, as a non EU citizen, you want to use your boat in European waters without paying VAT, as you are entitled to do for 18months*, then it is absolutely critical that you do NOT register the boat in the UK on either part 1 or part 3. But I'm now guessing about what your real question is, so I'll leave that one there...!

* at which point you need take the boat outside the EU for a mere 1 night to restart a fresh 18month clock

 

[tonyh1]

No, under UK law boats don't have to be registered. but under some no UK laws they do, so unless you confine your boating to UK waters it makes sense to register.

We have 2 registers in uk, so called "part 1", and "part 3" aka SSR. Only part 1 is comparable to a full register of the type you see in other developed countries. Part 3 is much lighter weight thing and doesn't record legal title, etc, but it does fulfil the non UK law point in the preceding paragraph so is a convenient and cheap fix for UK boaters who want to cross to, say, France. In fact that's why the register was created.

Only natural persons, not companies, can be registered as owner on part 3 but I'll leave part 3 discussion there because as I say it is hardly a real register.

On the main or "proper" part 1 register, only UK or other EU persons can register, but non natural persons ie companies can register and that is quite normal/not unusual. Your US company may not register as it is non EU. It could set up a EU subsidiary to register or you could set up an EU company to register, and if you did either of those 2 things I'd suggest a UK company for ease of administration. The EU subsidiary/company could, in addition, be a mere trustee under a bare grantor trust so that the US company retains beneficial ownership, if you wish. Otherwise, or as well as that, the EU company could elect disregarded status on form 8832 (aka "check-the-box").

Because of all that, the US tax position for you if you use an EU company can be identical with the postion that would have prevailed if the US company had registered the boat itself.

All that said, I'm answering your question without actually knowing what the question is. If you just want to sail from UK to France, then use the part 3 SSR register and register in your own personal name. Easy peasy, online. If one factor for you is that, as a non EU citizen, you want to use your boat in European waters without paying VAT, as you are entitled to do for 18months*, then it is absolutely critical that you do NOT register the boat in the UK on either part 1 or part 3. But I'm now guessing about what your real question is, so I'll leave that one there...!

* at which point you need take the boat outside the EU for a mere 1 night to restart a fresh 18month clock

Wow... Thank you so much.

My motivation is more about funding the purchase and where the money will come from more than anything. Dual taxation treaty or not I don't really want to be buying a £100,000 boat in my own name if I can avoid it.

 

[MoodySabre]

If you own the boat through a UK company (as mooted above) then you will pay tax on the use of the boat as a benefit in kind equal to the commercial value of a boat rental. There are almost no bases on which the taxman will accept that the vessel is a company asset with no benefit arising unless you are a charter company and never sail it for pleasure. Don't go there.

 

[Momac]

I don't really want to be buying a £100,000 boat in my own name if I can avoid it.

Why not ?

 

[jfm]

If you own the boat through a UK company (as mooted above) then you will pay tax on the use of the boat as a benefit in kind equal to the commercial value of a boat rental. There are almost no bases on which the taxman will accept that the vessel is a company asset with no benefit arising unless you are a charter company and never sail it for pleasure. Don't go there.

It's difficult to get into this without knowing op's residence or objectives. The above wouldn't be true if for example op is non uk resident and administers the company that owns the boat from outside the uk, because in those circs the bik you mention would be non uk sourced. Devil is all in the detail, of which we have almost none!

Op if you want to fill in the details then of course lots of people in here can provide info and help

 

[MoodySabre]

It's difficult to get into this without knowing op's residence or objectives. The above wouldn't be true if for example op is non uk resident and administers the company that owns the boat from outside the uk, because in those circs the bik you mention would be non uk sourced. Devil is all in the detail, of which we have almost none!

Op if you want to fill in the details then of course lots of people in here can provide info and help

The OP talks about buying a boat in the UK. I have assumed he is UK resident but even if he is not then he receives emoluments in the UK. I was cautioning against a UK company that is all.

 

[tonyh1]

Thank you for help guys. I am normally resident in the UK and I own a UK Company and a US Company. I have less personal funds than I have funds in the Companies and as mentioned, I would not want to buy it in the UK Company name anyway. As I have around $200k liquid in the US Company I just wondered if it may be possible for the US Company to buy and register the boat - but seemingly not. I am not going to transfer the money out of the US and into my personal account for all sorts of reasons. I appreciate your comments, help and advice. Thanks again.

 

[jfm]

The OP talks about buying a boat in the UK. I have assumed he is UK resident but even if he is not then he receives emoluments in the UK. I was cautioning against a UK company that is all.

Ok. I didn't assume that. Which I suppose illustrates that we are short of facts here

If he were non UK resident he wouldn't be taxed in the uk merely by virtue of "receiving emoluments in" the uk. And if a company is used in a manner that triggers the bik tax you mention it makes no difference whether it is a uk company; a non uk company would produce an identical outcome. Thus I don't agree your caution against using a uk company

 

[jfm]

Thank you for help guys. I am normally resident in the UK and I own a UK Company and a US Company. I have less personal funds than I have funds in the Companies and as mentioned, I would not want to buy it in the UK Company name anyway. As I have around $200k liquid in the US Company I just wondered if it may be possible for the US Company to buy and register the boat - but seemingly not. I am not going to transfer the money out of the US and into my personal account for all sorts of reasons. I appreciate your comments, help and advice. Thanks again.

I am assuming C corp not S corp, as you don't say. The us company can buy the boat and the boat can be registered in your name, the uk company's name, or another dormant company's name. You need a bare grantor trust to avoid a us deemed dividend. (I'm assuming you want to avoid a us dividend but you don't say).

Problem with above is uk bik tax mentioned above. Assuming you do it carefully you have taxable income in uk of usd40k x D/365 pa where D is number of days you use the boat. Some detail paperwork is needed. That bik tax disappears if you accept the dividend and pay tax on the dividend income. So you have a trade off. If you register the boat in say jersey and keep it in the med you only pay us tax (at 15%? I can't remember the rate on a " qualified" dividend) on the divi and don't pay uk tax. Decisions decisions!

 

[MapisM]

I am assuming C corp not S corp, as you don't say.

Hehe, now that's an understatement, if I've ever seen one.
Aren't you actually assuming C corp 'cause "all sorts of reasons" was enough for you to make a rather highly educated guess?

 

[jfm]

You have it in one MM, as usual. "C" does feel a pretty safe guess doesnt it?! These threads are crazy as you know. There is a natural temptation to help but the lack of information makes it impossible really

 

[tonyh1]

You have it in one MM, as usual. "C" does feel a pretty safe guess doesnt it?! These threads are crazy as you know. There is a natural temptation to help but the lack of information makes it impossible really

I only asked if it were feasible for an American Company to own a UK registered boat! It would seem not. FWIW, I think that I said a US company and not a Corporation.

Please feel free not to contribute or just be sarcastic if you want. It was a genuine question and a couple of highly informative responses for which I am grateful as well as a couple of sneering ones.

I shall certainly be thinking twice before asking for help, advice or an opinion in the future.

 

[jfm]

It would seem not.

Oh get over yourself and grow some thicker skin, you wimp! It's just an internet forum

Reference company/ corporation, the USA is the only major country in the world that makes a distinction between those two words. In virtually all other countries they mean the same thing. So be precise and just say whether your entity is flow through or not

Ref the bit I quoted above, that's not what I said. A us company or corporation can own a uk registered boat; you just need to make a bare grantor trust and find an EU registrant. The registrant won't own the boat brneficially but its name will appear on the register

 

[MapisM]

I shall certainly be thinking twice before asking for help, advice or an opinion in the future.

i understand it was MY sarcasm (about which I have no problem to declare myself guilty as charged) that stroke a nerve, even if you"re now replying to jfm, whose answers to your OP were instead as accurate as you could get.
if that's correct, I'm sorry if I made you jump in the above conclusion, BUT!
If you're not willing to disclose some details behind a Q which you'd like to be properly answered, and it's pretty easy to guess in advance that such Q will raise others, related to those details you'd rather not publish on the web, well, not asking at all certainly is a sensible option.
But this doesn't mean that you can't get help and advice in any other situation.
you actually did even in this case, in fact.