Abacus assists owners and their representatives in understanding the diverse requirements associated with yacht ownership, whilst providing a tax efficient ownership structure to facilitate effective yacht ownership and operation.
When purchasing a high value asset such as a yacht 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 yacht.
Here are some of the considerations:
- What entity type should I use – Company? Partnership? Foundation? Trust?
- Will the use of a corporate entity offer more privacy?
- Will my vessel be used on a pleasure only basis or will it be chartered for 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 ownership to ensure that custody and management of your prized vessel 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 yacht ownership
- Yacht registration
- VAT registration and administration
- Yacht leasing
- Statutory and administration services to your structure
- Sales and purchase administration
- Yacht insurance administration
- Bookkeeping and accounting services
- Cash management facilities
Whether for pleasure or commercial use, a yacht is a significant investment made up of time, effort and money. In an age of increased litigation, experts recommend that ownership of a high value asset that moves from country to country, exposing itself to differing jurisdictions’ legislative requirements and tax laws, is owned by a corporate structure rather than in an individual’s name. The corporate structure affords the advantage of segregating the inherent risk involved and will also provide privacy of ownership; placing your yacht in a carefully structured ownership entity can potentially offer you a number of benefits, including tax and VAT savings.
Registering your Yacht
Where and when you intend to use your vessel will often drive the decision on where to register your yacht. Selecting the right jurisdiction is imperative and with so many registers available, 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.
Abacus is based in two of the world’s leading shipping jurisdictions, the Isle of Man and Malta, both of which offer a number of benefits to anyone considering yacht ownership or yacht registration there.
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 Yacht Ownership
The Isle of Man is a well-established, respected and regulated jurisdiction, with a strong history and heritage in shipping and one of the fastest growing ship registers in Europe.
The Isle of Man Ship Registry provides a high quality and fast response customer service with a low cost scale of charges. The registry is also favourably placed on the much sought after “White List” of the Paris Port State Control Memorandum of Understanding which reduces the potential for being targeted for inspection by Port State and Customs officials and reduces the increasing threat of yacht seizure by foreign authorities.
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 Yacht Ownership
Located in the centre of the Mediterranean’s crystal blue waters, Malta has always retained a strong heritage in 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 now hosts the largest and one of the fastest growing ship registers in Europe, and is considered a major logistics provider in the Mediterranean. Its maritime sector’s growth and success continues as its reputation as a safe and efficient location remains to attract clients from across the globe.
The Malta Ship Registry provides a high quality and fast response customer service with a low cost scale of charges on yacht registration. The registry is also favourably placed on the much sought after “White List” of the Paris Memorandum of Understanding on Port State Control, which reduces the potential for being targeted for inspection by Port State and Customs officials.
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 and possibility to pay a low-rate tonnage tax only
- A potential low effective VAT rate where an entity leases a yacht and VAT registration available on charter yachts.