4 in 5 UK Boat Owners May Quit Cruising Due to Post-Brexit Schengen Rules

[Alita49DS]

Originally Posted by Greg K

After six months, all residents of Spain are liable for taxes on all worldwide income including investment and rental income. They must also declare all of their worldwide assets including property and file wealth tax on all of these assets which starts as low as 600k depending on which area of Spain you live in. Add the matriculation tax of 10% on the boat value and another 2k minimum for legal fees to sort out the Kafkaesque tangled web of tax filing requirements, and for the average cruiser who owns a decent home and has some financial assets in the home country, it might start to look like a fairly expensive year in the Med. Are you seeing my point, now?

You are, of course, absolutely right. The first problem is that, as someone here wrote earlier, Brexit is really dumb. The second problem would appear to be that there is no cure for some people being too dumb to realise it. The third problem is that there is zero mileage in those of us who warned about this outcome saying "We told you so".

We are now stuck with a disaster that the Tory government has had the underserved good fortune to have largely covered up in the press by the impact of the pandemic.

[robertevans]

Why would a cruising boat apply for residency?
If you want to be a resident in spain (live and work there) why would you expect to get away with out paying tax, if you live and work in the uk you pay taxes.
As I understand it a boat can stay in the EU for 180 days leave EU for 1 night and the clock restarts no tax if you get a visa you can stay in spain for a year on that visa instead of any 90days in any 180 day span.
If you have property there not a boat then I can understand it will be different.

[Clivevon]

Originally Posted by Alita49DS

You are, of course, absolutely right. The first problem is that, as someone here wrote earlier, Brexit is really dumb. The second problem would appear to be that there is no cure for some people being too dumb to realise it. The third problem is that there is zero mileage in those of us who warned about this outcome saying "We told you so".

We are now stuck with a disaster that the Tory government has had the underserved good fortune to have largely covered up in the press by the impact of the pandemic.

What price freedom?

[Clivevon]

Any price.

[Anders]

Originally Posted by robertevans

Why would a cruising boat apply for residency?
If you want to be a resident in spain (live and work there) why would you expect to get away with out paying tax, if you live and work in the uk you pay taxes.
As I understand it a boat can stay in the EU for 180 days leave EU for 1 night and the clock restarts no tax if you get a visa you can stay in spain for a year on that visa instead of any 90days in any 180 day span.
If you have property there not a boat then I can understand it will be different.

The Non lucrative visa you linked to gives you 90 days to gain residency and once you have residency you can stay for a year.

[flightlead404]

Originally Posted by PirateBarnabus

Yeah, I think I'd be happy with the 20 Yr old and the Bentley.
Sailing could take a "back seat" (no pun intended) 🤔

Having been there and done that, I'm not so sure

[robertevans]

Originally Posted by Anders

The Non lucrative visa you linked to gives you 90 days to gain residency and once you have residency you can stay for a year.

The link gives you a Visa for 1 years temporary residency, you dont become a tax paying resident.
But you do have to prove you have aprox €32,000 in the bank for a boat with 2 persons (you dont have to spend it just prove you can support yourself) and medical insurance.

[Octopus]

The good thing about Brexit is that it is teaching people the value of the European Project. The other good thing about Brexit is that many of those that voted for it will have died of old age within ten years, so England and Wales can rejoin (Scotland having left the United Kingdom and rejoined some years earlier and Northern Ireland having become part of a United Ireland).

Countries within the EU will have had an object lesson in the value of remaining in the EU and countries outside the EU will have a striking example of the value in joining a large trading block where people are free to live, work and travel.

Given time, the preposterous idea that people working together and trading together brings peace and prosperity can be rolled out to the rest of the world and so there will be an end to war, just as the EU brought to an end a millennia of war between its members.

Meanwhile, the difficulties affecting cruising are just part of the salutary lesson and should be welcomed as a valuable learning experience.

[boatman61]

Originally Posted by Octopus

The good thing about Brexit is that it is teaching people the value of the European Project. The other good thing about Brexit is that many of those that voted for it will have died of old age within ten years, so England and Wales can rejoin (Scotland having left the United Kingdom and rejoined some years earlier and Northern Ireland having become part of a United Ireland).

Countries within the EU will have had an object lesson in the value of remaining in the EU and countries outside the EU will have a striking example of the value in joining a large trading block where people are free to live, work and travel.

Given time, the preposterous idea that people working together and trading together brings peace and prosperity can be rolled out to the rest of the world and so there will be an end to war, just as the EU brought to an end a millennia of war between its members.

Meanwhile, the difficulties affecting cruising are just part of the salutary lesson and should be welcomed as a valuable learning experience.

Scotland can never join alone.. apart from the financial handicaps and debts Spain for one will never back it.. it would be tantamount to giving Catalonia (the most prosperous region) the green light for another Independence bid, plus Scotland shot themselves in the foot when the SNP backed Catalonia a couple of years back.
As for England and Wales.. they will never surrender the freedom of the £ and the goal is an ever expanding Eurozone by Treaty.
But let the Remoaner fantasy continue despite the collapse of the 'Red Wall'

[Greg K]

Originally Posted by robertevans

The link gives you a Visa for 1 years temporary residency, you dont become a tax paying resident.
.

When it sounds too good to be true, it usually is. From the link Montanan provided: https://balcellsgroup.com/non-lucrat...residence_visa

lucrative residence visa

Finally, we wanted to include a section in which we could discuss the taxes you will have to pay with this visa in Spain.
First of all, because this residence card requires you to stay a minimum of 183 days a year in the country to renew, you will become a tax resident.

• This basically means that you will have to pay income tax on your worldwide income.

[Anders]

Originally Posted by robertevans

The link gives you a Visa for 1 years temporary residency, you dont become a tax paying resident.
But you do have to prove you have aprox €32,000 in the bank for a boat with 2 persons (you dont have to spend it just prove you can support yourself) and medical insurance.

After 183 days in Spain you are tax resident.
The visa gives you 90 days to get residency. Have you ever heard of anyone becoming resident based on a marina address in Spain? I know it happens in Portugal but never heard of anyone doing that in Spain.

[robertevans]

Originally Posted by Anders

After 183 days in Spain you are tax resident.
The visa gives you 90 days to get residency. Have you ever heard of anyone becoming resident based on a marina address in Spain? I know it happens in Portugal but never heard of anyone doing that in Spain.

Below is what was on the email I was sent by the Spanish embassy
Nothing like what you are saying

NON LUCRATIVE VISA
1. Two copies of National Visa Application Form duly filled and signed by the
applicant.
2. Two recent colour photos with white background, 3´5 cm x 4´5 cm.
3. Original passport, valid for at least 1 year from submission of application.
4. Police Clearance from countries of residence for the last 5 years*.
5. Medical certificate: The applicant must be accredited to not suffer from any
diseases that can have serious health consequences in accordance with the
provisions of the International Health Regulations 2005.”*.
6. Medical Insurance with an insurance company authorized to operate in Spain. *
7. Documents proving sufficient financial means for your living expenses and
accommodation (2.151,36€ per month plus 537,84€ per each family member).
8. Form EX-.01: Non-Profit Temporary Residence Authorization Application Form.
9. Form 790-052.
After the application and other documents have been submitted they will be
sent to Spain. This process can take up to 3 months. If your application is accepted, we
will contact you. You have to enter Spain within the period of validity of your visa.
Passport must be stamped on arrival. You have to apply for a Foreigner Identity Card
within 1 month of your arrival in Spain at Oficina de Extranjería.

[duncan_ellison]

Originally Posted by Montanan

So an extra 500 to 5,000 Pounds expense to be surveyed and become certified when exported from the EU to the UK, and similarly from the UK to the EU.

I suspect that is just the cost of the survey / certification and does NOT include any refitting that may be required to achieve certifiable condition.

And that cost will be in addition to the import duty and VAT due upon sale to a resident of the imported customs territory.

To try to be helpful (rather than just adding to the political rhetoric here). I've researched this specific issue well and the problem is worse than it appears.

Take for example a fairly recent sailboat from any of the major vendors, say a 2005 Beneteau which you've been using in Europe. You've been happily running around Europe taking comfort in the CE 'A' Marking affixed to your boat and assumed that was all you needed. And indeed it is all you need in EU even if you sell the boat.

But now, you decide to bring it back to the UK to take advantage of the RGR (Returned Goods Relief) before it drops drops away June 2022. So you pick a day in April 2022 to bring her back.

Unfortunately for you, EU CE marking is no longer valid, so you have to have a UKCA marking PCA (Post Construction Assessment) done at a cost of £4,000 + VAT (current cost according to CEProof).

Doubly unfortunately, the engine fitted to your boat complies with RCD I standards and UKCA mirrors the EU RCD II standards now, so your engine doesn't (and cannot be made to) comply. This was fine for you to use indefinitely in Europe, but because you are making a new 'import' to the UK, you have to comply with the rules as they apply today.

So now you are in for £4.5K plus c. £13K for a new engine regardless of how shiny and new your old one still looks.

So you save £20K or so in VAT, but you spend £20K in completely pointless paperwork just so you can keep your boat in the UK. Oh, and don't forget that if you ever leave for more than 3 years, you have to pay the (UK) VAT again when you return.

The only tip I can offer is that when you get your UKCA mark, you can simultaneously apply for an updated EU RCDII mark at little extra cost.

This is the plight of someone who didn't manage to bring their boat to the UK before the hard stop of last December during a pandemic when almost no-one could practically do so.

Rather than face all this crap, I just sold my boat and will buy again within Europe.

I don't really see who this helps apart from the anointed ones who hand out the PCA certificates who can charge whatever they like and HMRC.

[Montanan]

VAT is a privilege tax and a consumption tax; so be sure enjoy the privilege and the departure of your money.

Be that privilege of consumption being in the UK or in the EU.

Feeling rather privileged to not have any State or federal VAT, or sales or use taxation in Montana. We only have income tax and real estate property taxation. The cost of purchases of either goods and services is significantly less without any government imposed taxes on such consumption. That is why Canadians like to come to Montana to shop and purchase goods in Montana, considerable cost reduction when their is no VAT/GST below the 49th parallel. With the US / Canadian border closed except for essential travel purposes there has been a huge reduction of traffic in the stores.

And I can't even imagine what all those collected revenues to governments are intended to pay for. Nationalized health care would be one major differential between government service provided by the EU / UK and Montana but if I recall health insurance is paid as a separate taxation on wages paid [imposed on the employee and the employer].

[Joh.Ghurt]

duncan_ellison, I guess the shipyards will deliver new boats with both markings soon and for them, this whole procedure will be a slight benefit, as used boats become more of a hassle. I wouldn't expect much sympathy from Beneteau and the rest.