Options for flagging, titling boat purchase for dual US/other citizen

[flightlead404]

Hi

I'm doing some initial planning for a cruising boat purchase 2-3 years from now. I'm a dual UK/US citizen currently residing in the US, my partner is a Taiwanese citizen but currently w/o US residency.

For the purposes of 1) tax avoidance, 2) insurance, and 3) flexibility (e.g. entering Cuban ports) what are the pros and cons of purchasing out of the US, titling/flagging the vessel outside the US, or even creating a business (or buying a shelf company) and titling the boat in the company.

e.g. If I buy a Belizian shelf company and title the boat in that and flag somewhere else, Nevis, Caymans etc, how does that impact US tax liability, any other future liability, going to Cuba or other ports?

I realize 90% of the answers will be "talk to a professional" which I fully intend to do (pm me with recommendations) but am looking for personal experience here.

FWIW when I finally push off the dock I plan on never living in the US again, although I may visit. I may consider relinquishing US citizenship also, if that's a factor.

[Wander4Wonder]

Im a dual citizen us/uk. The US will tax you regardless of where you are but the UK wont. If you are a “tax resident” of a non us locailty and its part of a tax agreement you can avoid double tax on like 110k usd but still need to file. Its ridiculous. One of a handful of countries that do that. I have no clue about flagging or title rules ive heard some boat brokers and consultants can advise (try youtube) ive heard some carribean nations are better for such a situation.

[pyrrano]

You can register a boat in Poland for a few hundred euros, it's for life (no annual fees) and if you stay out of EU water for more than 90 days, no VAT. Poland is a EU county, the flag is recognized worldwide.

You can also register with USCG and not to pay US (state) tax if you say out of US waters for more than 90 days or you put the boat on the hard off season.

[Joh.Ghurt]

You need to be really careful under which conditions you can operate an non-taxed boat as an US resident in US waters. For the EU you pretty quickly have to pay up. Also if you want to operate some kind of business with your boat, you might need to conform to so many rules that the money saved becomes negligible.

[Zzmeyer]

In the us, most tax is either sales or use tax and is determined by the state. In general, the liability is determined where the boat is located. Most states give grace periods, some have no tax. In my experience once you know the state the boat will be located the state website will provide good information. Be careful of a couple paragraph answer and the states I’m most familiar with have certain “gotchas”. For example, in California if you take delivery in international waters and cruise out of the state for a year you pay no sales tax. However, if you maintain a slip in California or simply store the boat out of the country they deem you had no intention of cruising and did it to avoid taxes. You are approaching it the right way. I know of several boaters who figured they wouldn’t get caught. They all got caught.