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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 recent 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 2007 annual Flag State Performance Table, the Isle of Man’s ship registry was rated extremely well.

Benefits of Isle of Man Registration

• Isle of Man legislation which includes favourable tax treatment
• No annual tonnage tax
• No additional registration nor renewal fees
• An efficient registration process which can process registry applications quickly and effectively to suit requirements
• Marine administration staff available 24 hours a day, able to assist the owner concerning matters such as safety, avoidance of pollution, manning and officer certification
• Security of mortgages can be registered on the Island against the yacht
• The prestige attached to the British Red Ensign which Isle of Man vessels fly and the entitlement to the support of the United Kingdom Government including consular services throughout the world and the protection of the Royal Navy
• Professional efficient corporate services
• The Demise Charter Registration both “IN” and “OUT”
• Non-disclosure of beneficial owner to local authorities

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

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 Supervision Commission 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
E: dennismcgurgan@grantthornton.co.im
T: +44 (0)1624 639494
F: +44 (0)1624 662249