Isle of Man Yacht Registration and Management Services

Isle of Man Yacht Registration and Management Services

The principal reasons for using the Isle of Man as a jurisdiction to hold assets such as private jets and superyachts are threefold, providing the following:

• Confidentiality for the ultimate beneficial owner;.

• Ring fencing of the asset and limiting personal liability;

• Assistance in mitigating VAT on the purchase and ongoing management of the asset.

HOW CAN IFG HELP?

IFG International Limited can assist in terms of structuring with regard to the acquisition, registration and charter of superyachts.A superyacht is defined as being over 24m but in industry terms the general rule is 50m +.

The main issues that impact on the structuring in this regard are:

• Acquisition of a new build – whether inside or outside of the EU;

• Acquisition of a pre owned yacht – protecting existing VAT paid status;

• Client residency;

• Use of yacht – personal or commercial use, inside or outside EU territorial waters;

• Choice of register, flagging;

• Tax planning – VAT mitigation on acquisition and/or charter.

Safety and security is governed by the Megayacht Code, which was introduced in 1998 and has since become the recognised international safety standard for yachts in excess of 24m. The code applies to vessels registered in the UK and the other Red ensign countries, such as Isle of Man, Cayman Islands, Bermuda, Gibraltar, Anguilla, British Virgin Islands, Falkland Islands, Guernsey, Jersey, Montserrat, St Helena and the Turks and Caicos Islands.

Our clients’ main requirements are as follows:

• The requirement for a quality flag – red ensign state;

• A suitable structure to provide confidentiality and limit personal liability, based on personal or commercial use;

• VAT mitigation or minimisation.

CHOICE OF FLAG STATE

This is an important issue and whilst the Isle of Man is a white listed state as far as the Paris Memorandum of Understanding (Paris MOU) is concerned, ranking in the global top ten in terms of flag state performance, we can facilitate flagging in other states, as required.

The flag state is important, as being registered with a red ensign white listed state means that yachts are less likely to be troubled by Port State Control and means that they will be able to carry on their business as freely as possible. The flag state is primarily responsible for the safety standard of the yacht, although by boarding and inspecting yachts in national ports, Port State Control ensure that the condition of the yacht and its equipment comply with international standards.

VAT RELATED ISSUES

This is a complex area and requires specialist advice. IFG International Limited can assist in obtaining suitable advice in this regard via its network of professional advisors.

To be able to circulate freely within EU territorial waters VAT paid status must have been obtained or it must be necessary to comply with the Temporary Import (T I) regime.

If a client wishes to retain the yacht for their own personal use/pleasure, it will generally only be possible to minimise the VAT on import or new build, via an EU jurisdiction with a low VAT rate, such as Malta.

In general terms should the client be happy to charter the yacht on commercial terms then it is possible to recover the VAT - if the acquisition is structured properly - via a corporate entity registered for VAT in a suitable jurisdiction, such as the Isle of Man, whereby the VAT would be paid and recovered, ie no cashflow issues would arise.

In addition, VAT can be mitigated on the charter - if structured correctly - via a suitable jurisdiction such as the Isle of Man. This will be based on where the VAT registration is and the supply and useage of the yacht.

ISLE OF MAN SHIP REGISTRY

• Established in 1984, a component of the British register;

• An independent, international register with a reputation for quality and high standards of service, with 24/7 cover for registrations and surveys;

• Operates a category one Red Ensign group register;

• White listed and regularly features amongst the top states in the annual flag state performance tables and the Paris MOU;

• No annual tonnage fees;

• Cost effective;

• Support via British consular services;Dedicated surveyors.

OUR SERVICES

• Corporate ownership structures;

• Tax planning;

• Yacht registration – choice of flag state;

• Finance;

• VAT - registration and returns;

• Accounting services.

Associated services include, crewing, insurance, communications, charter and yacht financial management

IFG does not provide taxation or legal advice. The information and expression of opinion expressed in this briefing note are not intended to be a comprehensive study or to provide taxation or legal advice. Specific advice concerning individual situations should be taken and IFG can provide introductions to advisers who specialise in this area. Please note that some of the services referred to above may be provided by a suitable third party firm known to IFG International Limited.