There are a number of factors involved in the purchase of a yacht and having sound advisors that help you navigate the entire process, and ensure that your best interests are protected, is highly recommended.
Finding the Ideal Yacht
This process will involve a multitude of considerations such as whether the yacht will be used for personal or commercial use, your lifestyle, individual taste, etc. Other factors that need to be considered include whether you want to buy a new or a second-hand yacht, the length of the yacht, and the size of its engine, whether it will be put to use seasonally or year-round.
The ownership structure of the yacht will impact not only your rights and share of ownership, but also the tax you will be liable to pay at acquisition, during ownership and on eventual sale. You will need to consider the different types of ownership options, from an individual purchase to entering a partnership, forming a limited company to setting up a trust.
There are a number of due diligence checks that need to be performed before an offer is made to purchase a yacht and after entering contracts. Some of the most important elements are:
- Title Check: This will help ensure that you don’t end up being liable for an unregistered mortgage on the yacht
- Sea-Trial and Survey: These help in establishing the exact condition of the yacht
- Builder’s Certificate, VAT Certificate, Service Records, Mooring Charges, etc.
Sale & Purchase Agreement
At this stage, you and the seller will, among other things, negotiate warranties and indemnities, delivery of the yacht and payment. The most recommended form of contract is from the Mediterranean Yacht Brokers Association (MYBA) adopting their Memorandum of Agreement (MOA), which is recognised worldwide although there are various other recognised forms also.
Tax Planning and Registration of the Yacht
The domicile you choose to register your yacht will have a major impact on the tax owed on it. You will also need to consider VAT and income tax (if you plan to charter the boat commercially).
In conclusion, selecting professionals such as the expert team at Saracens, who are experienced in luxury asset purchases and sales, is critical for your transaction to progress quickly and smoothly, and to protect you from unexpected taxes or repair bills.
If you would like further information regarding the law surrounding the sale and purchase of yachts – please phone our London office on +44 (0) 20 3588 3500 to speak directly to one of our solicitors, or request a call back and we will contact you.