Buying and Selling Yachts
Decide what you want your boat for before you start looking. Day cruising? Long range cruising? Holiday Home? Charter? Watersports? Where and how are you going to use the boat?
Review your budget and don’t forget mooring and marina fees, fuel, slipping and winter storage fees, life jackets. If you are thinking of chartering, the cost of setting up a company and having the boat ‘coded’ to the MCA requirements.
Talk to several brokers and gather information before viewing. Take your time. Talk to friends, people at the marina, etc about the types of boats you are considering. Read reviews from the magazines – a number of magazines have libraries of reviews.
Arrange viewings with those you will be boating/buying with.
When you find a boat you like, talk it through with the broker, who will provide a Sale & Purchase Agreement that both parties sign. Any amendments must be agreed by both parties. This is a binding contract so be sure before you sign. (NB A broker, as opposed to a dealer, is not a party to the contract – he is acting as the vendor’s agent.)
You will need to place a deposit – usually 10% – which the broker must put in his Client Account (not his usual business trading account). This is your money held by the broker as stakeholder.
Arrange a survey: the broker may not recommend a surveyor but may have a list of local surveyors. Yacht Designers and Surveyors Association (YDSA) is the sister association to ABYA and all YDSA surveyors are assessed rigorously before being elected into membership. See the YDSA website for a list of surveyors. Read the survey report through carefully and discuss any queries with the surveyor. Advise the broker of any important defects. If they are substantial you may consider withdrawing under the terms of the contract, revising the price to complete the sale, or requiring the vendor to provide a repair or piece of equipment. The contract will have a time frame for actions to be taken – be clear what these are. You will be responsible for lifting fees and the surveyor’s fees.
If you require finance ensure you contact a finance house in good time, as the money needs to be available when you reach completion.
If you want a trial sail, advise the broker early so he can set this up, and allow for changes due to weather, for instance. You will be responsible for any slipping or skipper’s fees.
Decision made, check the inventory and that the title documentation is lodged with the broker to save any problems later, including the VAT documentation as appropriate.
Set up the electronic transfer to the Broker’s Client Account in good time. Once the funds have cleared, completion can take place. The broker will give you the documentation, including the Bill of Sale transferring title from the vendor to you, and the keys to the boat.
Don’t forget to insure the boat before you take possession. You will almost certainly need a survey for this, so don’t be tempted to skip the pre-purchase survey, which can be used for this purpose too.
If you haven’t sailed or driven a powerboat before do get some training before heading off. It is essential you know the ‘Rules of the Road’ and have adequate safety equipment. The RYA has a wide range of courses to assist you.
The Boat Selling Process
A yacht is an extremely valuable asset. Yacht values may often match or exceed those of houses and will usually be the most valuable asset that an owner holds outside of their home.
Yachts are also an asset that can move freely, both within and outside of the EU, and can originate from anywhere in the world.
This freedom of movement presents a multitude of risks in respect of legal title, registration, VAT and CE-compliance (also referred to as RCD ‘Recreational Craft Directive’), all of which any potential purchaser should be very wary of before handing over their money and sailing away from the dock.
Furthermore, establishing the correct value of a yacht in the present market conditions, effectively and proactively marketing it in the right places, dealing with the subsequent enquiries and then successfully taking an enquiry all the way through the delicate process of viewings, negotiations, creation of legal contracts, secure handling of client monies, assisting and liaising with the surveyor, correct transfer of title, administration of registration and any necessary dealings with marine finance (in respect of settling outstanding or arranging new marine mortgages) can and often will take a great deal of time, commitment, knowledge and experience.
To sell your yacht we provide
- Extensive high end advertising to the UK, European and International markets
- A professional, proactive, private client telephone and face to face yacht broking service
- Advertising on Yachtworld.com (2.5 million visitors p/month) and the major yacht sales sites
- An exclusive live and daily updated database of active cruising yacht buyers
- Use of social media advertising including Instagram, Google +, Twitter and Facebook
- Accompanied viewings with experienced yacht sales professionals
- Professional ABYA yacht conveyancing & legal transfer of vessel title
VAT/RCD and registration
Extracts from HMRC Notice 8 ‘Sailing your pleasure craft to and from the UK’ – April 2012
Can a vessel lose its VAT paid status?
VAT is due on the importation of any vessel from outside the EU. However, there are provisions for this VAT to be relieved when an EU VAT paid vessel returns to the EU, refer to sub-section 3.4. If an EU VAT paid vessel leaves the EU, and whilst outside the EU it is sold, the new owner will, unless eligible for one of the reliefs described in this Notice, be liable to pay VAT if the vessel is brought back into the EU.
Will I have to pay VAT on a vessel to be kept in the EU?
Yes if, you import a vessel into the EU you will have to pay VAT on the vessel’s value at the time of import; however in certain circumstances reliefs may be available for vessels imported from outside the EU
you are buying a new pleasure craft in the EU and intend to keep it in the EU, you will have to pay VAT on the purchase price. If you are keeping the vessel in the UK, the VAT due will be payable in the UK. If you buy a new vessel in one Member State but intend to keep it in another Member State, you should consult VAT Notice 728 New Means of Transport which explains the relevant rules
What documents will be required to provide proof of the VAT status on a used vessel?
EU residents should only use a vessel in the Community if it is VAT paid or ‘deemed’ VAT paid. Documentary evidence supporting this should be carried at all times as you may be asked by customs officials to provide evidence of your vessel’s VAT status, either in the UK or in other Member States. Documentary evidence might include:
- Original invoice or receipt
- Evidence that VAT was paid at importation
- Invoices for materials used in the construction of a ‘Home-Built’ vessel
A registration document on its own does not prove the VAT status of the vessel, as there is no link in the UK between the registry of the vessel and the payment of VAT. If you have difficulty in providing the information, you should contact the VAT, Excise and Customs helpline on Telephone: 0300 200 3700.
Certain vessels that were in use as private pleasure craft prior to 1 January 1985 and were in the EU on 31 December 1992, may be deemed VAT paid under the Single Market transitional arrangements. As Austria, Finland and Sweden joined the EU later, the relevant dates for vessels in these countries are ‘in use’ before 1 January 1987 and moored in EU on 31 December 1994. After this date there were no further transitional arrangements agreed by the EU Commission for subsequent EU expansions.
The following documents are useful to prove the age and location of the vessel:
- Marine survey
- Part 1 Registration
- Builders Certificate
- Insurance documents
- Receipt for mooring
- Receipt for harbour dues
- Dry dock records
If you are unable to provide any of the above for used vessels kept in the UK you should, whilst cruising within the EU, carry a Bill of Sale (if applicable and between two private individuals in the UK). Whilst this is not conclusive proof that VAT has been paid, it does indicate that the tax status is the responsibility of UK customs authorities. It is also advisable to contact the relevant authorities in the Member State you intend to visit, or their embassy in the UK, to confirm what documentation will be required in advance of your voyage.
When buying a used pleasure craft from any VAT registered business in the EU, you should make sure that the invoice shows separately any VAT which that business has charged to you on supply of the pleasure craft. If the invoice does not show VAT separately you may have difficulty in demonstrating that VAT has been paid. If you are buying from a business that does not charge VAT on the transaction or from a private individual in the EU and the seller states that VAT has previously been paid on the vessel, you should obtain evidence from the seller that VAT has previously been accounted for.
Further guidance notes courtesy of ABYA:
Boats being used in the EU should have VAT-paid status unless they are just visiting. The original VAT invoice, from when the boat was either first bought within the EU or when it was imported from outside the EU, is usually sufficient evidence. A boat that is VAT-paid but is sold outside the EU loses its VAT-paid status and therefore VAT must be paid if the boat is brought back into the EU. Boats kept outside the EU for over 3 years may have to pay again (See Customs Notice 8).
The above applies to all boats built or brought into the EU since 1 January 1985, or on the joining dates of States that have become EU Members since then. Boats already in EU Member States and territories on 1 January 1985 pre-date the requirement.
The evidence of VAT-paid status will generally be an invoice, showing the VAT element and a VAT number, or similar document, such as a completion statement. Boats sold between companies should show the VAT element on the invoice. Some EU states (notably Holland) ask for the original invoice, but otherwise a certified copy kept on board should be adequate. Keep the original and a couple of certified copies safely elsewhere. It is vital to pass this information on when the boat is sold, as it may be requested by Customs officers in either the UK or elsewhere in the EU.
In the case of home-builds and fit-outs, copies of all the major invoices should be kept and passed to subsequent owners to show VAT-paid status. Customs Notice 8 sets out further details.
Please note that HMRC do not have copies of individual VAT invoices from boat builders, dealers or other boat sales transactions.
Any queries should be referred to HMRCs VAT, Excise and Customs helpline – 0300 200 3700. If they seem unsure, ask for the matter to be referred to the HMRC Unit of Expertise on Yachts. Request any advice in writing, keep it with the boat’s documentation, and pass it on to any subsequent owners. RCD – Recreactional Craft Directive
Guidance notes courtesy of ABYA
What is it?
The RCD is a European Directive that applies to virtually all recreational craft between 2.5m and 24m brought into or offered for sale in the EU market. It came into force on 16th June 1998. Boats covered by the Directive are required to comply with specific ISO standards, although equivalent standards may be applied. It is helpful to retain the compliance document with the boat’s papers for future owners and in case of any query.
Unlike the MoT for cars, compliance is not an on-going requirement. Evidence of compliance will be found on the plaque provided by the boat builder which will, amongst other things, give a HIN/CIN (Hull/Craft Identification Number). This is a 14-digit number containing the manufacturer’s code, year of build and model year. There should be a paper document as well – often found in the back of the owner’s manual – whose details should agree with the plaque. The builder’s invoice and/or certificate may also give the HIN. You should see a CE mark. There are a few exemptions from the RCD such as boats built solely for racing, gondolas and commercial vessels (not recreational vessels used for charter, but vessels such as fishing boats and workboats).
Boats being brought into use or placed for sale onto the EU market for the first time must comply with the Directive at that time. Privately imported boats may need to be assessed for compliance with the Directive on arrival. Some US boats are built to the RCD and have the required documentation, but you need to find out before you buy. It is worth noting the possibility that the newly-imported boat may not economically be able to be brought to compliance, particularly if the engine does not meet the requirements. YDSA surveyors can give professional guidance, or use the RYA links below for additional information. Boats that can show they were in an EU protectorate or other territory before 16th June are treated the same as boats within the EU States.
Boats built in the EU
Boats built in the EU since 1998 should have documentation that they complied with the RCD when first offered for sale, and the same is true of most boats imported through authorised dealer networks.
Boats built or in the EU prior to June 1998 were not expected to comply retrospectively. Boats coming back into the EU, perhaps following sale, retain their status provided the owner can provide evidence the boat was built or in the EU prior to June 1998 – the Builders Certificate is ideal. A Bill of Sale, marina receipt or other dated evidence for non-EU built but located in the EU before June 1998 should suffice.
A vessel that has been supplied as a shell, or a “sailaway”, or indeed built from scratch by a home builder, can be exempted from the certification and documentation requirements of the Recreational Craft Directive provided the builder retains ownership of the vessel for at least five years from the date that the vessel was first “put into commission”. Be aware that there are uncertainties around the meaning of “put into commission”: your surveyor should be able to provide some guidance in respect of your own case.
Hulls provided for fit-out should have an Annex 3 Declaration, which is the builder’s certification that the hull has been built in accordance with the RCD. Yacht Registration (UK)
Extracts of guidance notes courtesy of ABYA
You can register your boat under Part 1 or Part 3 of the Registry of Shipping and Seamen. This is operated by the Maritime & Coastguard Agency (MCA) at Cardiff. Part 1 is the closest to evidence of title. Applicants send the Registry a Declaration of Eligibility as well as Bills of Sale showing the history of the boat’s ownership for at least 5 years. If you plan to register your boat on Part 1 of the British Registry, this requires measurement by an approved Tonnage Measurer.
Part 3 (also known as ‘SSR’ – Small Ships Register) is a simple registration which does not provide any evidence as to title, or ownership, of a vessel. It is useful if, for instance, you want to take a ski-boat on holiday with you to Spain as it shows that you did not buy the boat in Spain and therefore Spanish taxes, etc. are not due. No measurement is required. If you are taking out marine finance over approx £50k you will be asked to register the boat so the finance can be noted against it, in the same way as a house mortgage on the Land Registry.
Key benefits to registration on Part 1:
- BerthsAssists you to prove title to your boat;
- Allows you to register a marine mortgage;
- Provides internationally accepted documentation to ease passage to foreign ports;
- Entitles you to protection from the Royal Navy and the services of British Consuls;
- Can enhance the re-sale of your vessel;
- Provides proof of date of build in respect of the EU Recreational Craft Directive;
Ensures that your boat’s name is unique on Part 1
Marine or Yacht Finance is an extremely convenient and flexible way to purchase a yacht. With interest rates remaining at historic low levels, the ability to borrow money secured against the yacht allows a buyer to free up capital for other investments or leave current investments intact.
Whilst the number of primary marine lenders in the market is much smaller than pre-recession times, the flexibility of the loan products has increased greatly. Marine lenders fully understand the finances of yacht owners and also how they like to buy, use and sell their yachts, and can tailor plans to suit.
The purchase and subsequent ownership of a yacht involves not only a great deal of financial commitment, but also great deal of responsibility. Marine insurance exists not just to cover the value of the yacht, but also to cover potential harm caused to others along with both yourself and your crew.
It is important that insurance is considered at an early stage of the purchase process as in many instances it is not possible to transfer ownership until a boat yard or marina can be advised that the yacht will remain suitably insured.
The benefits of using Yacht Warranty:
- Confidence when buying
- 3 & 6 months Warranty Plans available through approved Partners only
- Coverage throughout Europe, Croatia & Turkey
- Hassle-free – Claims are paid directly to the dealership or repairer of their choice
- Transferable Coverage – Warranty Plans may be transferred to a new owner at the time of the craft sale
- Add value when selling their craft by transferring the Warranty to the new owner
- Access to Vessel Vault to store and manage their crafts important documents
We Lift Boats
We have a 50 Tonne Mobile Boat Hoist, a HIAB and a Mobile Crane. We offer Pressure washing, blocking off ashore and storage in a working boatyard. We can provide you with electric and water. We offer antifouling, polishing and the replacement of anodes. Full boatyard facilities & friendly service. We have an onsite engineer who deals with Mercury & Yamaha outboards.
We Keep Boats
Deepwater Marina Berths
Deepwater Swinging Moorings
Whether a yacht owner is a complete novice or a more experienced sailor with many thousands of sea-miles covered, the learning process is never complete. While there may be few statutory requirements in the UK for an owner to hold formal qualifications, tuition is an excellent way to increase confidence and enjoyment for an owner and their crew.
We are able to introduce buyers and yacht owners to a number of companies and individually qualified instructors who offer a comprehensive range of tuition courses and methods including:
- RYA training courses from taster sessions to Ocean master qualifications
- VHF & SSB courses
- Own boat ‘one-on-one’ tuition
- Yacht & engine maintenance
- Offshore safety and survival training
- Instructor training
- General boat handling
- Ladies only training
- RYA Competent Crew – Ocean master
- RYA Day Skipper
- International Certificate of Competence
- Yacht racing
- Sail trim
- First aid and medical training