Swiss Boat Register

[jimmy_the_builder]

Completely irrelevant if you buy it. The current owner can do that as he is non resident. As soon as he sells it then it needs to be imported unless he sells it to another non resident who is eligible for temporary import. If you read HMRC VAT Notice No 8 it explains this in detail (EU rules not just UK).

So, what the broker says is correct. To buy it legally Spanish VAT is due on the current value at the ruling rate.

I thought there was an 18 month limit on TI after which time the non-resident owner needed to reset the TI clock by taking the boat back out of the EU before bringing it back in (and starting a new 18 month TI period)?

 

[Tranona]

I thought there was an 18 month limit on TI after which time the non-resident owner needed to reset the TI clock by taking the boat back out of the EU before bringing it back in (and starting a new 18 month TI period)?

Yes, but again completely irrelevant for the OP who is EU resident so if he wants to buy the boat and keep it in the EU either he or the seller must pay VAT. If a non resident buys it he can apply for temporary import and the clock starts again for him.

 

[petem]

I thought there was an 18 month limit on TI after which time the non-resident owner needed to reset the TI clock by taking the boat back out of the EU before bringing it back in (and starting a new 18 month TI period)?

See my post #17.

For a Swiss boat to retain its VAT free status it needs to visit a non EU country every 18 months (or at least leave territorial waters, i.e. go 13 miles offshore). Of course owners of 34ft pleasure craft are unlikely to do this, even less likely will they keep records to prove it. If a UK buyer purchases such a boat then should the authorities discover the boats history then they could levy the back taxes + penalties against the boat (i.e. the new owner). I believe this is limited to five years (can anyone confirm?). Now, this is extremely unlilely to happen however the charge could be significant (i.e. worst case might be VAT levied on the value of the boat when it was 18 months old plus penalties so c. £50k). My second question is, would this put buyers off when I come to re-sell the boat in either Spain or the UK?

 

[petem]

Yes, but again completely irrelevant for the OP who is EU resident so if he wants to buy the boat and keep it in the EU either he or the seller must pay VAT. If a non resident buys it he can apply for temporary import and the clock starts again for him.

See my post #17.

For a Swiss boat to retain its VAT free status it needs to visit a non EU country every 18 months (or at least leave territorial waters, i.e. go 13 miles offshore). Of course owners of 34ft pleasure craft are unlikely to do this, even less likely will they keep records to prove it. If a UK buyer purchases such a boat then should the authorities discover the boats history then they could levy the back taxes + penalties against the boat (i.e. the new owner). I believe this is limited to five years (can anyone confirm?). Now, this is extremely unlilely to happen however the charge could be significant (i.e. worst case might be VAT levied on the value of the boat when it was 18 months old plus penalties so c. £50k). My second question is, would this put buyers off when I come to re-sell the boat in either Spain or the UK?

 

[Tranona]

See my post #17.

For a Swiss boat to retain its VAT free status it needs to visit a non EU country every 18 months (or at least leave territorial waters, i.e. go 13 miles offshore). Of course owners of 34ft pleasure craft are unlikely to do this, even less likely will they keep records to prove it. If a UK buyer purchases such a boat then should the authorities discover the boats history then they could levy the back taxes + penalties against the boat (i.e. the new owner). I believe this is limited to five years (can anyone confirm?). Now, this is extremely unlilely to happen however the charge could be significant (i.e. worst case might be VAT levied on the value of the boat when it was 18 months old plus penalties so c. £50k). My second question is, would this put buyers off when I come to re-sell the boat in either Spain or the UK?

The chances of there being any problem with previous VAT issues is very small if VAT is paid when you buy the boat. In theory the unpaid tax (if proven) can attach as a debt to the boat, but you would have recourse to the seller. However the boat has been there for 13 years so doubt there has been any issues. There is a possibility that the act of paying VAT now could trigger off interest, so it makes sense to only buy the boat VAT paid so that it is the seller who pays it - which is legally what he is required to do as a condition of his TI.

You will then have a VAT receipt dated 2015 (or 2016) which would satisfy any future purchaser. Does not completely remove the residual potential that is currently attached to the deal but moves it even further to the unlikely. You may also find that customs would have great difficulty in enforcing any charge on you as a "good faith" buyer - that is you have a clean BoS and evidence that VAT has been paid on the transaction. You may want to take legal advice in Spain on this issue.