Buying Yacht as non-US resident - help !

[letsgetsailing3]

Originally Posted by AndrewA2

another thing. As I am a British Citizen, I don't believe I can register a boat in the US. Also that would add additional TAXs and import fees (as I am understanding things...) ?

You can register a boat in a state as a British citizen. You can't "Coast Guard Document" it. Those are two different things. You don't need to document it with the Coast Guard, and can't as a foreign national.

You'll probably need to register it in whichever state you want to keep it in.

[gaucho]

So much mis-information on this post hurts.

If you are a UK passport holder, still have address and people who can help you with minimal forwarding (or want to hire a forwarding service) AND are willing to pay for a Lloyd's surveyor to do the tonnage thing (which will cost you around 1000-1500 usd in Florida, dunno if you can get that in your area as easily) plus the expenses of sending and validating title stuff from the US to the UK, I would DEFINETIVELY go UK Part 1 Registration. It's really inexpensive (I think 125 quid for 5 years), the MMSI is free thru the OfCom, you can do the whole thing thru the internet, and it's pretty much a non-hassle. This will also allow you to hire an insurance company that won't charge you thru the nose once you start sailing outside the US like Y Yacht Insurance, Paentanius (the european one, not the US terrible one), Topsail. None of which would be available with a US flagged vessel.

Brexit should be a non issue. In a year or so, your boat will be part of the UK and nothing else. So except for the UK, you will be able to take your boat wherever you want, including all of Europe, as you would a US flagged boat. Same rules.

IIMS lists one guy in Florida that can do tonnage measurement for Part 1 (or Jersey or Channel Islands Part 1) registration:

Andrew Tuhan
+ 1 954 648 0824
1515 SE 17th Street, P.O. Box 460603, Fort Lauderdale, Florida, FL 33316, United States

Enjoy.

[AndrewA2]

Originally Posted by letsgetsailing3

You can register a boat in a state as a British citizen. You can't "Coast Guard Document" it. Those are two different things. You don't need to document it with the Coast Guard, and can't as a foreign national.

You'll probably need to register it in whichever state you want to keep it in.

Would USCG Documented be the same (or close too) flagging it ? Ie only US citizens can US flag a boat?
But anyone can state register a boat ?

And which of those triggers a TAXable event? I ask as if i buy a boat overseas, i would pay sales tax there and then. But the more i read, the more it sounds like the instant you hit US waters you have to pay sales or use tax (basically double taxing). But i am also reading that that is not the case, but im either not reading/or understanding how that can be.

Thanks for all your help and patience BTW - as well as information !!!

[Montanan]

Originally Posted by AndrewA2

First - Thank you for all of that information!!!!
The way i read what it says is: That any boat must be registered in MS waters... so does that mean no one can sail in MS without a MS registered boat, even tourists passing through?

I would assume that cruising permits would be available, and those would have max length of stay and min length away before a new one can be reissued?

another thing. As I am a British Citizen, I don't believe I can register a boat in the US. Also that would add additional TAXs and import fees (as I am understanding things...) ?

Anyone can register a boat with a State so long as the boat resides in the State. You do not need to be a Citizen of the USA, or a resident of MISSISSIPPI. But Foreigners can not Document their vessels with the US Coast Guard, that is to say, flag it as a USA boat. But the boat needs to reside in Mississippi for the statutory period of time to qualify for MI registration; at the State level it is not about you, it is about the boat. Each State is unique and not consistent.

There may be exemptions to MI boat registration for foreign flagged vessels which their department of motor vehicles is not disclosing on their websites since the website is primarily intended for Redneck boaters and not Redcoat Brits.

If you intend to cruise internationally, I would recommend the British Small Boat registry and fly your Union Flag, erhhh, not the EU flag you might wish to get that done in the BVI where the boat can be surveyed as to its tonnage.

State registration regulations provide for temporary visitation of boats that are registered in other States, generally a 90 day waiver. If you linger in a State you typically need to reregister to and with the State your boat has changed its residing in status. Where you the owner resides is not of issue, it where the boat resides that is the key factor for registration, titling, and all the host of taxes and fees.

Just call them and ask for a supervisor who has specific guidance. Personally, I would start the call with the Department of Motor Vehicles and the Department of Revenue at the State Capitol. Don't discuss with some clerk at a local office, they generally be clueless about boats that have clews. When I desire a clear answer, I will often call and ask for the Governor. In Montana, if the Governor isn't busy he/she may take the call, else I often get bumped to the Governor's Chief of Staff who will then dial in the respective heads of the various State Departments and engage in a conference call to discuss issues and sort out matters. Last time I had the Chief of Staff, the heads of the Department of Revenue and the Department of Motor Vehicles and the Attorney General all on the line for about 20 minutes. But then in Montana, up until recently one could just look up the Governor's home phone number and give the Governor a call at their home on the land line, or go knock on their door. Bring your dog to the State house so it can play with the Governor's dog, pet's break the ice, works like a charm regardless of political party persuasion. Ditto for the US Senators and our sole Congressperson in the House of Representatives, except cold beer is preferred to pet's in Washington DC. Or you could ask for the cell phone numbers and then just give them a call or text message each of the senior elected legislative and executive personnel.

[AndrewA2]

Originally Posted by gaucho

So much mis-information on this post hurts.

If you are a UK passport holder, still have address and people who can help you with minimal forwarding (or want to hire a forwarding service) AND are willing to pay for a Lloyd's surveyor to do the tonnage thing (which will cost you around 1000-1500 usd in Florida, dunno if you can get that in your area as easily) plus the expenses of sending and validating title stuff from the US to the UK, I would DEFINETIVELY go UK Part 1 Registration. It's really inexpensive (I think 125 quid for 5 years), the MMSI is free thru the OfCom, you can do the whole thing thru the internet, and it's pretty much a non-hassle. This will also allow you to hire an insurance company that won't charge you thru the nose once you start sailing outside the US like Y Yacht Insurance, Paentanius (the european one, not the US terrible one), Topsail. None of which would be available with a US flagged vessel.

Brexit should be a non issue. In a year or so, your boat will be part of the UK and nothing else. So except for the UK, you will be able to take your boat wherever you want, including all of Europe, as you would a US flagged boat. Same rules.

IIMS lists one guy in Florida that can do tonnage measurement for Part 1 (or Jersey or Channel Islands Part 1) registration:

Andrew Tuhan
+ 1 954 648 0824
1515 SE 17th Street, P.O. Box 460603, Fort Lauderdale, Florida, FL 33316, United States

Enjoy.

Thank you for this !

Yes I do have a UK address. So mailing etc is no problem at all.
Would you recommend this over the Jersey suggestion?

Where would VAT hit (from time of sale, or moment of hitting EU or UK(?) waters?
You mention sailing the med would not be an issue, would that be with a cruising/sailing permit ? or N/A as VAT would have had to have been paid ?

[Montanan]

Originally Posted by AndrewA2

Would USCG Documented be the same (or close too) flagging it ? Ie only US citizens can US flag a boat?
But anyone can state register a boat ?

And which of those triggers a TAXable event? I ask as if i buy a boat overseas, i would pay sales tax there and then. But the more i read, the more it sounds like the instant you hit US waters you have to pay sales or use tax (basically double taxing). But i am also reading that that is not the case, but im either not reading/or understanding how that can be.

Thanks for all your help and patience BTW - as well as information !!!

If you purchase the boat and depart within the statutory period of time one can apply for and receive exemptions from VAT, Sale and Use taxes, excise tax, etc. Again specific to the laws of the jurisdiction that the transaction occurred, Which transaction tax is a type of privilege tax. You will need to learn the details of the applicable jurisdiction. Determine the local jurisdiction regulations and procedures for the place you are buying the boat and then plan to depart in the timely period of time so as to avoid such transaction taxation, else you could become subject to some doubling of taxation.

The moment you enter a country's water the good [e.g., the boat and all its accessories] are in essence imported and subject to customs clearance adn taxation of all types. There being waivers to such duties and taxes in most countries for temporary importation, often in the form of a "cruisers permit / license" of some sort. Involves paperwork and bureaucracy.

The States provide reciprocal credit for sales / use taxes paid for a good in another State. Not all States have Sales or Use Taxes [Montana does not],

Similarly one can receive a waiver for sales or use tax by a State in which you the purchase transaction occurs if the good is exported from that State, say to another State or to another country. Not all States have property taxation on boats in which State the boat resides on a specific tax appraisal date during the year. They don't give credit for taxes paid to foreign countries, just to member States of our Union. Not dissimilar to the taxation scheme in the EU to which the UK has Brexited.

This is a subject that is very jurisdictionally dependent. There are no general rules. Determine the relevant countries and States and then dig into the rules that apply to find the loopholes and waivers.

[Montanan]

People, when utilizing American English, commonly get the terms registration, titliing and documenting confused and use them inappropriately. They are each uniquely different matters.

Documenting a boat with the US Coast Guard is USA "flagging" of the vessel. Documentation is "titling" the boat with the US Federal Government. You are not a US citizen so documenting your boat with the US Coast Guard is not an option, so you can disregard documenting. Being a Brit you could flagged it with the UK by having it included in the UK registry. A boat that has UK Registry is rather equivalent to a US flagged boat that has been documented by the US Coast Guard, albeit with different maritime law results.

A boat can also be titled by a State of the USA, but a boat is not allowed to be titled at the State and at the Federal government. That is to say, it's titling is done once, either federally [which is called documenting the boat] or the titling is done at the State, NEVER both, well at least not legally both, I'm sure some people have messed up by doing such as the State and the Federal databases are not linked so as to avoid such inappropriate duplication happening.

Registration is not the same as titling or documenting. Registration is done at the State level, there is no Federal registration. To repeat, registration is not titling. A boat can be registered at the State level and it can also be titled at the State level. Mississippi offers titling of boats, in addition to registration of boats. Mississippi does not require a boat to be titled but MI does have registration requirements. Mississippi does not require registration of US Documented boats. Some States will require State titling of a boat if it has not been documented by the US Coast Guard or has not been foreign flagged, if and when the boat is in need of registering with the State; titling then being needed to be completed before registration. We got fifty States and so something like 50 times 50 ways of doing things. Don't get me started. Still waiting for the Russians to release the official results of the Democratic Party caucus in the Great State of Iowa.

Titling / Documenting provides for financing by lien notifications and clarity of ownership. I may be mistaken but I believe the "short form" of UK registry does not provide for lien registration instead it just provides for nationality of the vessel under maritime law. That is to say, if I recall correctly there is a form of British Registry that is not the equivalent of titling, rather it is merely flagging. Brits do their own thing. You can google that matter if you wish to avail yourself of your citizenship rights under the UK.

If you finance your boat the lender will review the titling status and lien registration and may make you change your papering to fulfill their safeguarding of the collateral.

[rogue trader]

sounds to me these bloody tax people are taxing the hell out of every body every way they can worse than the mafia

[adlib2]

[QU.
Also I can apply for US cruising permit and leave every 6 months for 15 days.

You can get a yearly permit, at least I do as a Canadian, want to buy my boat?

[Montanan]

Boat Registration in the UK is not compulsory unless it is intended to cruise outside of territorial waters. There are two Registers in the UK that one may put one’s boat on 1) the Part I Register – which has a mechanism for mortgage registration and 2) the Part III Register/SSR – which acts as a passport for British boats cruising overseas – there is no mechanism for the registration of mortgages.

If the boat is on the Part I Register of British Ships, the purchaser has some protection in relation to the good title of the seller. However, in most cases pleasure craft are not officially Registered British Ships (and inclusion of the name in Lloyds Register does not mean that the boat is on the Official Register). The purchaser must therefore take great care to ensure that the seller has proper title to sell the boat.

Part I Registration is available to British nationals, non UK nationals exercising their right of freedom of movement of workers or right of establishment. If you do not meet these criteria then you may still be able to register on Part I; for further details contact the Registry at the
address listed below.
Part I Registration is the only option if the boat is over 24 metres, or company owned, or if you have taken out a marine mortgage and as a condition of the mortgage you are required to go on the Part I. It is also the only option if you wish to register on the British Register but you are resident abroad. If this is the case, you would not be able to register on the Small Ships Register, as that has a residency requirement. If you are not ordinarily resident in the UK, in order to register on Part I you will need to appoint a representative person, who may be either an individual resident in the UK, or a company who is based in the UK. All correspondence relating to the registration of the boat will be sent to the representative person.

Part I Registration is the only option available if:
 The boat is over 24 metres, or
 The boat is company owned, or
 A person or company lending money on the security of the boat requires a marine mortgage to be registered against it.
Entitlement to Part I registration is limited to ships owned by one of the following:
(a) British citizens or persons who are nationals of an EU state who are *established in the UK. (*established - it is not sufficient to live or even be an employee in the UK to be 'established' in accordance with Article 52 of the EEC Treaty. To be 'established' a person must make an economic contribution to the UK e.g. by having a business, including being self-employed. If you have any doubts about your 'establishment' you
should consult the Registry). Note: Brexit may change the rules of eligibility for Registry.
(b) Bodies corporate incorporated in any EU state.
(c) Bodies corporate incorporated in any relevant British possession and having their principal place of business in the UK or in any such possessions.
(d) Citizens of British Dependent Territories, British Overseas Citizens and British Nationals (Overseas).
In addition, an unqualified person may be one of the owners of a registered ship if a majority interest in the ship is owned by qualified persons.
Where the owner or owners are not resident in the UK, the boat may only be registered if a representative person, or company resident or incorporated in the UK is appointed.

The main advantage that a person has if their boat is on the Part I Register, is that it makes it easier to sell the boat. The two main concerns of any buyer are “does the seller own the boat?” and “is the boat subject to a marine mortgage?” These two crucial points are fairly easy to check if a boat is on the Part I Register - you simply send a cheque for the appropriate fee off to the Registry and ask for a transcript of the boat.
If a boat is of a significant value then it is worth considering registering on the Part I; it is asking a huge leap of faith on behalf of any buyer to part with a significant amount of money
with no proof of title or mortgages! Registration currently costs in the region of £124, plus you need a tonnage and measurement survey. It lasts for 5 years.

Can't speak for British law, but in the USA, "titling" is a form of attestment of ownership, it is NOT proof of ownership.

WHAT IS THE DIFFERENCE BETWEEN THE PART I AND THE PART III (SSR):
The main differences between the two registers are the eligibility requirements and the proof needed to register. Part I of the Register is more of a title register and proof of ownership, which can also record details of any mortgages on the boat, whereas the SSR is more of a passport for your boat to enable you to go overseas.

To be eligible to register on the SSR your boat must be under 24 metres and privately owned. You must either be a British citizen; a non-UK citizen exercising your EU right of freedom of movement or worker’s right for establishment; British Dependant Territories citizens; British Overseas citizens; British subjects under the British Nationality Act 1981;
British Nationals (overseas) under Hong Kong (British Nationality) Order 1986 or Commonwealth citizens not falling within this paragraph.
You must also be ordinarily resident in the UK (which means living in the UK for periods which add up to 185 days or more in a 12 month period).
Registration on the SSR is normally a simple procedure; you fill out an application form, which you get from the Registry, you can now even complete the application form online, (see contact details below) it costs in the region of £25 and lasts for 5 years.
The registration papers issued for both the SSR and the Part I are of equal legal effect throughout the world. There is nothing in the Merchant Shipping Act that limits the scope of the SSR to Europe, it has the same legal effect as the Part I.

Royal Yacht Association Titling Check Guidance:

PART I REGISTERED VESSEL:
If the boat is Part I Registered then we recommend that you apply to the UK Ship Register (RSS) for a Transcript of the Register which will show evidence of any mortgages on the boat. If there is a period of time between obtaining a Transcript and completing the purchase, you should consider obtaining a second Transcript immediately before completion.
When a Finance House grants a mortgage over a boat it will usually insist that the vessel is put on Part I of the Register when lending £75,000 or more. If it does not do so and you make enquiries of the Finance Houses and either receive no response, or confirmation that there is no mortgage, should it come to light at a later date that one of the Finance Houses
you made enquiries of does in fact have a mortgage over the boat, a Court of Law may require the Finance House to accept some level of responsibility for failing to warn you of the situation. However, no such case has yet to be decided by a Court, so the position at law is not absolutely certain.

PART III REGISTERED VESSEL (SSR):
If the boat is Part III Registered (SSR) you should again apply for a Transcript however this will not provide any mortgage details but will give you some evidence as to claimed ownership over the period for which the Transcript relates.
If there is a mortgage on a Part III registered or unregistered vessel, despite there being no official record of it on the Register, the Finance House will have a first charge over the vessel which is enforceable against subsequent owners. In the High Court case of The Shizelle (1992) it was held that an unregistered mortgage on an unregistered boat was valid not only against the original borrow but also against any subsequent owner whether or not he knew of the mortgage. Given that a number of leading Finance Houses lend considerable sums of money on the basis of unregistered mortgages, this creates an obvious danger for buyers.
We therefore recommend that a buyer carries out the checks below.

IF THE BOAT IS NOT PART I REGISTERED YOU MAY WISH TO MAKE ENQUIRIES OF:
 The Finance Houses – in writing to ascertain if they have any outstanding mortgage
on the boat;
 The Vendor’s insurance company – in writing to obtain copy insurance certificates
going back 5 years;
 The Vendor’s Yacht Club – in writing for a reference on the Vendor e.g. how long he
has been a member/how long he has had the boat;
 The Vendor’s Mooring Company – in writing, to obtain copy receipts for mooring
charges during the period the Vendor states he has owned the boat;
 You may also carry out a due diligence check on the Vendor by consulting the
electoral roll.
IDEALLY YOU WILL WANT TO SEE THE FOLLOWING ORIGINAL DOCUMENTATION
(FOR BOTH PART I AND PART III REGISTERED VESSELS):
 A Certificate of Registry (if the boat is registered);
 Bills of Sale tracing ownership from the very first owner of the vessel to the current
Vendor;
 Builder’s certificate;
 Builder’s invoices;
 Original / copy VAT invoice;
 Evidence of date of arrival in the European Community;
 Confirmation of RCD compliance in the form of an owner’s manual (which should
include a written Declaration of Conformity), (the manufacturer should have a
technical file); or details of RCD exemption;
 An express written declaration from the Vendor that the boat is free of all debts, claims
and charges of any kind at all;
 Any other documents in the Vendor’s possession relating to his acquisition of the
boat, which may include:
o Equipment manuals;
o Service records;
o Receipts for repair work;
o Racing Certificates;
o Mooring charges;
o Harbour dues.
The RYA’ s standard Agreement for the Sale and Purchase of a Secondhand Boat contains a clause pertaining to the Vendor’s Right to Assign Title. Even if you are not using the RYA standard agreement in your purchase or indeed if you are purchasing a new boat, we recommend that you incorporate this clause into your documentation to become part of the contract.





If the boat is registered the purchaser is advised to make a search of the UK Ship Register (RSS) for a copy of the Transcript of the boat, just prior to completion and indeed again on the day of completion. If the boat is Part I Registered, any mortgages on the boat must be noted on the Register in order to be valid as against subsequent purchasers.
Completion itself usually involves the transfer of the balance of the purchase monies by the purchaser and a simultaneous handover of the ‘title documents’ of the boat. The purchaser should have seen a copy of these documents well in advance of completion and so should not be getting any late surprises. At the very least the purchaser will want to receive Bills of
Sale going back at least 5 years, Certificate of Registry, proof of VAT status and proof of Recreational Craft Directive [RCD] compliance. The RYA’s Title Checking Guidance Note contains detailed information on a boat’s ‘title documents’.

[billknny]

Originally Posted by Augi

I am not an expert or 100% certain but a US LLC can be 100% foreign owned. It will be required for the non USA owner of the LLC to get a tax ID number/ Social Security Number(very easy to do), and be shown on the US tax return for the LLC as the owner. A US LLC is probably the least expensive jurisdiction to set up to own a boat, easiest to set up and to manage except for filing the tax return. If you are not generating income and the tax return is straight forward the US tax return can be done for you for between $250 and $500. There are other jurisdictions that will accomplish the same thing, don't require a tax return, but are probably more expensive to set up, probably more expensive to maintain. Then there are other trade offs between the USA and other jurisdictions to analyze.

While it might be true that a USA LLC can be 100% foreign owned, to document the boat in the USA the corporation NEEDS to be majority owned and voting shares controlled by USA citizens.

No other answer is correct.

[jmschmidt]

Residency has nothing to do with buying a boat anywhere that I am aware of. You can live on the moon but if you are not a UNITED STATES citizen (no green card holders or illegal aliens need apply) you can't own a US Coast Guard documented vessel.

[jmschmidt]

Well I should have said your can own a US state registered boat but not US flagged if you are not a US citizen. Setting up a US LLC, corporation, partnership to own a US flagged vessel only works if over 50% of the entity's owners are US citizens. Penalties are severe for faking it, like confiscation of the boat.

As for the BVI, anyone can flag a boat there, they love the $1,000 plus fee every few years. US flag cost $26 a year.

[AndrewA2]

Ruling out US Flagging (documenting etc)

Tempted by BVI/Jersey Corp and buy the boat through that. Then doing the Cruising Permit dance those times it would be in the US .
Just trying to understand if VAT would be due when hitting EU waters or just UK waters? (Assuming thats would be the only time it would be due ?)

Suggestions and thoughts most welcome !!

[Audeamus]

Don't quote me but we were trying to remember why we chose Jersey over UK. We think it was because Jersey has a special relationship with Europe & VAT not liable unless you exceed 180 days. (I could go as NZ captain). Jersey is also cheaper. Now that UK out of Europe its moot a Foreign registered vessel will not be liable for VAT there unless it exceeds maximum allowable stay - same as almost anywhere else in the world. Possibly similar in UK for Jersey Registration although UK was not on our radar so didn't take much notice.