Brexit and Yachting: What you need to know | 2021 Posts
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Brexit and Yachting: What you need to know

On 1st January 2021, the United Kingdom ended its transition period and officially left the European Union. The changes that will come about from this separation, and the ripple effects across all industries, will be many. The new legislation is being written where now defunct EU laws are no longer applicable, and there will be a time of settling into the new way of life. What we wanted to know, however, is what changes superyacht owners or prospective owners will see now Brexit has happened. So we called on superyacht legal expert Mark Needham, partner of Hannaford Turner, to walk us through it.

TJB: So Mark, what has changed for you and your clients since the 1st January 2021?

Mark: A lot has changed! We knew it was coming, but the UK has finally (and officially) left the EU. Therefore, any EU laws which haven’t been brought into English law will no longer have direct application in the UK. It is a big shift from a legal and psychological perspective. I think everyone will, however, agree that it is good to finally have a sense of clarity now about the future, as the uncertainty of the transition phase has ended. It is ultimately better for people making long term decisions.

TJB: Can you please tell us exactly what the new VAT rules for superyachts are since Brexit?

Mark: Well the big focal point, from the perspective of UK resident yacht owners (or prospective owners), is that, as we’re not part of the single market anymore, there are some distinct advantages. The main one is that they can now keep a private yacht in the EU without paying import VAT of 20% of the value of the yacht – they can use the Temporary Admission regime. In the same way that someone bringing their US owned, US flagged yacht from the US or Caribbean can enter the EU without paying import VAT on their vessel can stay in EU waters for up to 18 months, so too can British yacht owners.

TJB: So, will current and prospective yacht owners reap the tax savings, or is this only on new yacht purchases?

Mark: Existing yacht owners may have already have paid or accounted for their EU import tax of 20% (depending on their particular set up), so this saving is for those heading down the road of buying a new yacht. It is also important to note that this is for the private use of a yacht, and not commercial. Owners wanting to commercially charter their yacht aren’t eligible for the tax exemption, but there are other options for these owners to consider, such as acquiring the yacht via a VAT registered business.

TJB: What changes will UK yacht owners wanting to charter their yacht see?

Mark: As most chartered yachts are already owned by a company, the changes may not that be significant depending upon what the set up was before Brexit. Many commercial yachts are owned within a company established in an EU country (Malta is a popular one), and they pay their taxes according to EU law. So essentially there may not be too many differences.

TJB: And lastly, how long can UK yacht owners actually spend on their yacht if it’s in an EU country?

Mark: Owners and their guests will have to comply with the visa rules of the country where their yacht is residing. Now there is no longer free movement, they will have to abide by the permitted length of stay – usually up to 90 days in every 180 days.

Mark is a partner of Hannaford Turner and an acknowledged industry expert in superyacht, private jet and luxury asset related legal matters. We appreciate him guiding us through these new times, and look forward to discussing our next Brexit topic: the implications for British yacht owners with regards crew and immigration changes.

If you would like to discuss the implications of Brexit, new regulations and compliance for your yacht, please contact

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+44(0)20 3693 9500

hannafordturner.com

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London, SW6 6AW, UK