Yacht Registration and Management

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Yacht Registration and Management in the Isle of Man

Isle of Man


The Isle of Man is a secure, respected and economical centre for the registration and management of yachts.

Ships have been registering in the Isle of Man since 1786. Since then legislation has been introduced which has facilitated the creation of the Isle of Man Ship Registry, which has ISO 9001 Accreditation, and the adoption of the “Mega-Yacht Code” enabling commercial yachts over 24 metres to be registered.

Isle of Man registered yachts, whilst considered British ships, are under the separate jurisdiction of the Isle of Man Marine Administration. Experienced surveyors enable the Island to ensure and maintain high standards of yachts. In the Round Table of international shipping associations 2010 annual Flag State Performance Table, the Isle of Man’s ship registry was rated extremely well.

 

Benefits of Isle of Man Registration

  • A favourable taxation regime designed to encourage business
  • A range of professional services designed to support shipping
  • Low costs and no annual tonnage dues
  • A professional Ship Registry providing a high quality of service
  • The right to fly the "Red Ensign" and access the support of British consular services world-wide.
  • Flexibility in the requirements for registered owners including acceptance of Limited Partnerships.
  • The availability of Demise registry both "IN" and "OUT"
  • Full political support for shipping
  • Non-Flag of Convenience status
  • Regular advice bulletins on key issues to help owners respond to them
  • Stable legal and political environment
  • European time zone

VAT Benefits of Isle of Man Registration


Although the Isle of Man is not part of the United Kingdom or European Union, by virtue of Protocol 3 to the United Kingdom’s accession treaty, the Isle of Man is one of a few “offshore” financial centres that allow zero rate tax companies to operate within the European Union’s Value Added Tax system and trade freely within the European Union.

An Isle of Man company can therefore take advantage of this through the following:

  • Reclaiming VAT on the yacht acquisition, import or purchase
  • Reclaiming VAT on Isle of Man or United Kingdom expenses
  • Importing or acquiring the yacht without sailing to the United Kingdom or Isle of Man
  • VAT deferment or claiming zero rating for yacht charter income

Unacceptable Yacht Leasing Structures for VAT Registration

  • A yacht leased to an individual who funded the purchase of that yacht(directly or indirectly) or is leased to a person (or persons) connected to that individual.
  • A yacht used solely by the individual who funded its purchase (directly or indirectly), and /or by a person or persons connected to that individual or if it is chartered to third parties as well, the third party chartering activity lacks sufficient continuity and substance to meet the business test as defined by Isle of Man Customs and Excise.

Commercial Yachts


Any Commercial Yacht proposed for registry must be of 24 metres in length or more and must be classed with one of the Classification Societies recognised by the Isle of Man. Vessels must also comply with the UK Mega Yacht Code. It is possible to register a commercial yacht for VAT purposes if it is to be a properly run chartered business which is set out on a commercial basis.

 

Pleasure Yachts


The requirements for a pleasure yacht to be registered are similar to commercial yachts, however a pleasure yacht must be used purely for pleasure and the prospective owner will be required to sign a declaration to the effect that the vessel is purely a pleasure vessel.

The legal definition of a yacht used purely for pleasure in Manx legislation is any vessel which at the time it is being used:

  • Is wholly owned by an individual/individuals/body corporate and is used only for the sport or pleasure of the owner or immediate family or friends of the owner, or officers or employees of the body corporate;
  • Is on a voyage or excursion which is one for which the owner does not receive money or money's worth for; or
  • Is owned by a body corporate but pursuant to a long term lease agreement is used only for the sport or pleasure of the lessee. Such lease agreements must specify that:
  • the vessel may only be used for private purposes and must not be used for commercial purposes;
  • the vessel must not be sub-leased or chartered; and
  • no other payments are made by or on behalf of, or for the benefit of users of the vessel other than by the lessee.
  • Is wholly owned by or on behalf of a members club formed for the purpose of sport or pleasure.

Grant Thornton (Isle of Man) Limited


Grant Thornton (Isle of Man) Limited is registered under the Isle of Man Financial Services Authority as a corporate and trust service provider and can provide a complete service for yacht ownership and yacht operators including:

  • Establishment of a corporate entity to own a vessel
  • Application for yacht registration on the Island
  • Provision of directors, secretary and registered office to the company
  • Provision of company secretarial and administrative services to the company
  • Preparation of charter agreements
  • Insurance for the yacht
  • Preparation and submission of VAT returns
  • Payment of expenses attached to the vessel
  • Application for necessary licenses
  • Bookkeeping, opening and maintaining bank accounts and the preparation of financial statements


If you are interested in yacht registration and require further information please contact:

 

Dennis McGurgan