Abacus assists owners and their representatives in understanding the diverse requirements associated with luxury asset ownership, whilst providing a tax efficient structure to facilitate effective operation and management.
When purchasing a high value asset such as a yacht or an aircraft it is essential to consider whether there may be wider financial or other liability implications. The answer varies greatly, depending on the intended use of the asset.
Key considerations include but are not limited to:
- What entity type should I use – Company? Partnership? Foundation? Trust?
- Will the use of a corporate entity offer more privacy?
- Will my vessel/aircraft be used on a pleasure only basis or will it be used for corporate or commercial purposes, to provide financial return?
- Do I need to obtain tax and VAT planning advice?
- Can I reduce my VAT cost on purchase and/or operation?
- Will cruising within the EU be a VAT issue?
With significant experience in the establishment and administration of structures for luxury assets, we will support you through the complexities attached to yacht/aircraft ownership to ensure that custody and management of your prized asset stays on an even keel.
We offer a range of superior quality services, tailored to each client’s individual requirements and delivered professionally, reliably and with complete integrity by a highly experienced and multi-disciplined team of experts.
Establishment and administration of tax efficient corporate structures suitable for luxury asset ownership:
- Establishment and administration of tax efficient corporate structures suitable for yacht and aircraft ownership
- Yacht and aircraft registration
- VAT registration and administration
- Yacht leasing
- Statutory and administration services to your structure
- Purchase and administration facilitation
- Yacht insurance administration
- Bookkeeping and accounting services
- Cash management facilities
When planning the structure for your yacht/aircraft, it is important to consider how and where the asset will be used, whether there is any tax or VAT exposure and whether the asset is intended to generate income and how tailored tax planning might maximise returns and minimise liabilities.
Whether for corporate, pleasure or commercial use, placing your asset in a carefully structured ownership entity can potentially offer you a variety of benefits including:
- Asset Protection
- Limitation of Liability
- Succession Planning
- Centralised Holding and Reporting
- Taxation and VAT
Abacus provides simple ownership structures for private, corporate and commercial yacht/fixed wing aircraft, working with owners and their representatives to assemble a support team that works alongside their family offices and intermediaries, giving the owner the freedom to enjoy their luxury assets.
Yachts and Aircraft Registration
Where you decide to register your yacht/aircraft will be largely dependent upon where and when you intend to use them. Selecting the right jurisdiction is imperative and with so many registers available and each offering different opportunities, the decision can often be difficult and confusing.
We offer multi-jurisdictional registration and will assist you in finding the most suitable jurisdiction for you, based on your individual needs and requirements.
VAT and Aircraft Ownership
Both fixed wing aircraft and helicopter are subject to VAT when operated within EU territories, regardless of the nationality of the owner or where the aircraft is registered.
We establish fixed aircraft ownership structures for clients seeking to reduce or mitigate their VAT cost for business and commercial aircraft and offer VAT registration and agency services for Isle of Man, Malta and other foreign entities (which can also be VAT registered in the Isle of Man or Malta).
Isle of Man and Malta VAT registration is carried out locally, quickly and can be granted to local and foreign companies as long as they are registered on the foreign companies register.
EU VAT Importation
If you intend to use your aircraft frequently within the EU and/or you plan to have EU nationals as passengers, Abacus can provide a solution to import your aircraft with a neutral rate of VAT and duty to ensure free circulation within the EU.
For example, depending on the proposed use of your aircraft, Abacus can arrange for importation at a zero rate of VAT providing it is a “Qualifying Aircraft” (an airline operating for reward chiefly on international routes).
Alternatively, where your aircraft is predominantly used for business purposes, Abacus can arrange for the use of a VAT deferment account to offset any VAT payable.
Yachts and VAT
Yachts that are purchased, sold and/or operated within European Union territories, irrespective of the owner’s nationality or where the vessel is registered, are subject to Value Added Tax (VAT).
If you intend to cruise within the EU territories, as an owner you need to consider the VAT status of the yacht and whether there is the option to reduce the potential VAT liability. The opportunity to do so will depend on whether the yacht is going to be used on a pleasure or commercial basis.
Where VAT may be an issue, Abacus can offer ownership structures and leasing services which allow you to reduce the effective VAT rate. We can also facilitate VAT importation of your yacht and assist you in sourcing suitable tax advice to ensure that the optimum route is chosen.
Malta and the Isle of Man provide the opportunity to establish an ownership structure for your yacht and provide for leasing of the asset. The advantage of leasing is the ability to reduce the effective rate of VAT or to defer the VAT payable on the asset.
Leasing can be particularly beneficial to owners intending to operate their yacht in the EU, but who are unable to take advantage of VAT exemptions.
Isle of Man Asset Ownership
The Isle of Man is a well-established, respected and regulated jurisdiction, with a strong history and heritage in shipping and aviation, and two of the fastest growing ship and aircraft registers in Europe.
Benefits of using the Isle of Man:
- Zero rate corporation tax
- No inheritance tax or death duties
- No capital gains taxes
- No stamp duty (including on share transfers)
- Zero rate insurance premium tax on asset insurance
- Potential for a low effective VAT rate using leasing
- Part of the EU for VAT purposes
- AA+ rated jurisdiction
- Independent of UK for direct tax purposes
- British Isle but not part of the UK
Malta Asset Ownership
Located in the centre of the Mediterranean’s crystal blue waters, Malta has always retained a strong heritage in both maritime, from its traditional fishing to its historic use as a transshipment hub. Today’s Malta is undoubtedly more focused on commercial and leisure shipping, however its rich history has awarded Malta with a strong maritime culture.
A well-established, respected and regulated jurisdiction, Malta also hosts a healthy growing aviation register which is establishing itself as a stable and strong registry in the aviation world.
Benefits of using Malta:
- Politically stable country with a robust regulatory and legislative framework
- Highly developed tourism sector
- A reputable and growing financial services industry
- A strong infrastructure
- Low crime rates
- English as one of its official languages
- Beneficial tax regime with an extensive network of double taxation treaties
- Low corporate tax rate, onshore for EU tax purposes