Owning a private yacht can be a luxurious and exciting way to explore the world and its many wonders. But for yacht owners, it can also be a complicated process when it comes to navigating international waters and the laws that govern them.

Fortunately, the Temporary Admission regime can provide private yacht owners with an easier and more efficient way to navigate these waters.

In her latest article, Head of Marketing and New Business, Lesley Walker explores the regime, also known as TA, how it works and how it can help make the experience of owning a private yacht more enjoyable.

Yachts and VAT

VAT is chargeable on yachts imported into the EU and on yachts purchased and owned by residents of the EU who are using their yachts within the EU. VAT is also chargeable on yachts, irrespective of ownership, which spend more than 6 months in any calendar year cruising in the EU, although there is scope to enable an owner to use a yacht in the EU without being liable for VAT.

In general terms, any EU resident who buys a new build or second-hand yacht, which is not VAT paid, will be required to pay VAT on the hull at the VAT rate applicable at the place of delivery unless the yacht is acquired for commercial purposes or through a leasing scheme.

What is the TA Regime?

Temporary Admission is a Customs tax relief regime that enables non-EU resident owners of private yachts the ability to bring their yachts into Europe for a limited time without having to pay VAT on the value of the yacht.

It is undeniably an important mechanism, without which many non-EU resident yacht owners would likely avoid visiting European waters due to the prohibitive cost of paying VAT on arrival that would ordinarily be applicable.

Eligibility

The TA conditions are fundamentally concerned with accommodating non-EU residents, flag states and owning entities. The main eligibility requirements are:

1. The yacht is registered outside of the Customs Union – the flag state of the Yacht is non-EU, for example, the Isle of Man, United Kingdom, Cayman Islands, or Marshall Islands.
2. The yacht is used by an individual established outside of the Customs Union – the owning entity is established outside the EU, for example, in the Isle of Man.
3. The yacht must be operated by an individual established outside of the Customs Union – the Ultimate Beneficial Owner must be resident outside the EU.
4. The yacht must be operated for pleasure/private use only.

Other conditions to note:

1. The goods must be imported with the intention of re-exporting at a later date, maximum 18 months.
2. No alteration of the goods is intended (allowing for maintenance/upkeep), i.e. no value is to be added.
3. The yacht can be clearly identified, e.g. hull identification number etc.
4. The overall Customs requirements are met.
5. A guarantee is provided if required (specific to the Member State).  

Subject to the above and meeting the broader TA conditions, an owner would subsequently be entitled to use the yacht in the EU under TA.

Time Limit

Under TA, a yacht can operate in the EU for a period of up to 18 months, for a maximum total period of 10 years. TA begins when the yacht enters the EU and ends when the yacht exits the EU.

Before the 18-month period is completed, the yacht must either pay EU import VAT or leave EU waters, calling at a third country port and obtaining appropriate evidence of the same.

Restrictions

A yacht will not be eligible for Temporary Admission if the importation is for the purpose of:

1. Refit and repair – Inward Processing Relief is applicable.
2. Boat shows – Temporary Admission for Exhibition is applicable.
3. The sale of the yacht (under TA, this would breach the conditions of the relief).

Be Prepared

When entering the EU under TA, it is important to be prepared should the yacht be required to complete/provide documentation to local authorities that evidences/supports the yacht’s temporary admission status.

Such documentation might include an oral or written declaration to the competent authorities, particularly to the Customs office of the first port of entry within the EU; an official temporary admission document completed when the yacht first enters the EU at the start of the 18-month period; a Costituto D’Arrivo, if entering Italian waters, which is issued by the maritime authority; or evidence to show that the principal user of the yacht is genuinely not established in, or a resident in the EU.

Conclusion

From simplified border crossings, reduced paperwork, and streamlined customs procedures, TA is a great way for private yacht owners to operate their yacht without the need for it to be formally imported, thus avoiding the Customs formalities, inevitable import VAT costs and structuring costs associated with EU importations.

However, it should be highlighted that there is far more to TA than that above, particularly in respect of EU crews, guests travelling on board, time limits and EU works undertaken etc., so the above only provides an overview of TA for the purpose of this article.

For this reason, I would always recommend that an owner seek appropriate professional advice from a qualified tax/VAT advisor, both in the form of written advice and practical safeguarding recommendations, before entering into any transactions of this kind.

Superyachts range in size, starting from 24m and the largest in the world, reaching nearly 200m; they are the definition of opulence and luxury.

Many people have the perception that the world of Superyachts is reserved for the rich and famous, and when it comes to owning a yacht and fitting the bill for the annual running costs, they just might be right.

There are many variables to consider when looking into the running costs of a Superyacht and each yacht will vary due to factors such as engine size, maximum speed, size of the crew and size of the yacht.

The average amount of running a Superyacht annually is 10% of the yacht’s value. In a 2015 report by Towergate insurance, on average, a 100-meter Superyacht with a top speed of 25 knots and 50 crew members should cost around $274 million per annum.

Crew

Let’s start with the crew… Crew live on board, some during the busy summer months or some year-round depending on the itinerary and requirements of the yacht. Crew costs include salaries, training, living expenses whilst crew are on board, travel expenses and insurance.

More experienced crew will require higher salaries, and the bigger the yacht, the more crew it will require. Some of the larger Superyachts have multiple chefs, a whole team of interior staff managing service housekeeping and laundry, an engineering team keeping the yacht running and a deck team to ensure the yacht’s exterior is always in pristine condition as well as driving the tenders and being navigational experts.

It is not unusual for crew salaries on larger yachts to reach €100,000 per month, whereas a smaller yacht with three crew would be closer to €16,000.

Crew will also need uniforms, which are supplied by yachting uniform companies and are embroidered with the yachts name and logo. Crew often have various outfits for day and night, water sports, casual and formal and a number of accessories to match.

Water Toys

Superyacht owners love to have the latest and greatest water sports toys and equipment on board, which all cost a pretty penny. Most yachts will be equipped with paddle boards, snorkelling equipment, kayaks, jet skis, sea bobs, a tender and a variety of inflatables. As an example, one jet ski can range between $5,000 – $20,000 depending on the make, model and spec, while the cost for a luxury tender can be in the millions.

Berthing and cruising

Where you plan to keep the yacht is another major factor to consider when looking at the running costs of a Superyacht. The fees charged for a berth in a marina are based on the yachts size, the demand for the marina as well as the amenities available for your yacht. For example, a berth in St Tropez in the summer months will cost a lot more than a winter berth due to the high demand in the summer. Ports can charge between €2,000 and €3,000 per night, and VAT, the use of electricity, water and garbage disposal will be chargeable on top of that.

Equipment

Keeping the yacht stocked with spare parts, filters, pumps, cleaning supplies, and equipment need to be factored into the running costs of the yacht. These costs vary depending on the equipment on board as well as the itinerary of the yacht, as on-board stores will need to be well stocked if the yacht is cruising in remote areas where supplies are not readily available.

Insurance, Medical & Maintenance

The 2015 Towergate Insurance report averages insurance costs at +- $240,000 per annum, which would include hull insurance, crew medical insurance and PNI.

The report also states that repairs and maintenance, depending on the age and usage of the yacht, can cost millions per annum. Maintenance includes regular servicing of the generators and engines; this is normally done once they reach a certain number of running hours. Maintenance on all interior and exterior finishings, paintwork, woodwork and equipment needs to be carried out regularly in order to keep the Superyacht at a high standard.

Depending on the material from which the hull is made, yachts need to be lifted out of the water every year, two years or five years for a hull inspection and survey. This will need to be done in a shipyard with the facilities to lift the yacht out of the water. These are called periodic surveys. Each yacht will need to comply with the regulations specific to that yacht, depending on its gross tonnage and hull material. The costs will be based on the yacht’s size.

Fuel

Fuel is a huge expense for a yacht as not only does the yacht need fuel for cruising; the generators require fuel to keep the vessel running while at anchor and underway as well as many of the water sports toys requiring fuel. As an estimation, a 70-meter yacht will consume 500 litres of fuel per hour when the engines are running, but the yacht is not moving, so this would be an example of when the yacht is at anchor.

The fuel consumption would be significantly higher when the yacht is cruising and could cost up to €24,000 for an overnight cruise of 12 hours at 18 knots.

Safety equipment

Yachts, by law, need to comply with certain safety and security regulations and this requires specific equipment to be on board. Each yacht, depending on size, design and maximum number of crew and guests on board, will have unique requirements. This equipment will include firefighting equipment, life jackets, immersion suits, life rafts and medical supplies. This equipment needs to be regularly updated and serviced as requirements and maritime regulations change.

Shore personnel

The last expense is on-shore personnel, which includes the services of a management company or charter brokerage if the yacht is commercially registered. The management company will manage items such as expenses, crew payroll, crew holidays and any booking of refits or maintenance works. A charter management company will market the yacht in order to reserve charters for the yacht in the months it is available.

Management fees will depend on each company as well as the services you procure.

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About West Nautical:

West Nautical sell, charter and manage superyachts from their head office in Newcastle upon Tyne. Since their inception over 25 years ago, West Nautical have become recognised as one of the most respected, trusted, knowledgeable and accountable professional services firms in yachting – largely due to their relentless determination to act in our clients’ best interests. Their approach and attitude is transparent, refreshing and focused on providing value-added services delivered simply, elegantly and affordably.

Leadership is defined as the action of leading a group of people or an organisation; or the state or position of being a leader. But, what characteristics define a good leader and what differentiates a leader from a boss?

For International Leadership Week, we highlight the qualities and skills we believe a good leader should possess.

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❔ How big is the global yacht fleet?

It is difficult to estimate the exact size of the global yacht fleet. However, it is estimated that there are several hundred thousand yachts worldwide.

Superyachttimes.com reported the global fleet afloat to be 9,198 yachts afloat as of today.

It’s important to note that the number of yachts in circulation may be understated, especially in countries where yacht registration is optional.

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❔ Where should I register my yacht?

Where you register your yacht will depend on several factors, including where you plan to use the yacht, your nationality, and the type and size of the yacht.

It’s important to note that different countries have different registration requirements and laws, and some countries may have restrictions on foreign-flagged vessels operating in their waters. Hence, it’s essential to check with the relevant authorities before deciding where to register your yacht.

Some common options for yacht registration include:

The country where you reside: If you are a resident of a country, you may be able to register your yacht in that country. This is often the easiest option, as you will be familiar with the laws and regulations, and you may be able to take advantage of any tax benefits that apply to residents.

The country where the yacht is based: If your yacht is based in a specific country, you may choose to register it there. This is a common option for yacht owners who frequently use the yacht in that country’s waters.

Flag of Convenience (FOC) countries: Some yacht owners choose to register their yacht in a “flag of convenience” country, such as Panama, the Marshall Islands, or the Bahamas. FOC countries are often chosen for their more relaxed regulations, lower taxes, and greater privacy.

FOCs often receive bad publicity with their yachts and are known to come up against various challenges from Customs and Port State Control. For this reason, we would always recommend a jurisdiction that is well-established, stable and home to an internationally respected flag of choice whilst still meeting your broader objectives and requirements.

It is also advisable to consult a maritime lawyer or a yacht registration company to help you with the process and ensure that your yacht complies with international maritime laws.

At Sentient International, we can guide where to register your superyacht.

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❔ What is the Red Ensign Group?

The Red Ensign Group (‘REG’) is a group of British shipping registers made up of the United Kingdom, the Crown Dependencies (Isle of Man, Guernsey and Jersey) and the UK Overseas Territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, St Helena and the Turks & Caicos Islands.

Where a vessel is registered in one of these jurisdictions, it is considered a ‘British ship’ and is entitled to fly the Red Ensign flag.

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❔ Will cruising within the EU be a VAT issue?

VAT is a complex issue and can be confusing for yacht owners cruising within the European Union (EU), particularly as VAT laws vary from country to country.

In general, VAT is a tax applied to the provision of goods and services within the EU and is usually charged at the point of sale. However, when it comes to yachts, the rules can differ.

In the EU, yachts can be subject to VAT when they are used for commercial or charter purposes or if EU residents use them for more than 183 days per year.

If you are an EU resident and plan to use your yacht for recreational purposes, you will not typically be required to pay VAT on the yacht. However, if you plan to charter your yacht or use it for commercial purposes, you will typically be required to pay VAT. Additionally, if you use your yacht in EU waters for more than 183 days per year, you will typically be required to pay VAT on the yacht.

Non-EU resident owners of private yachts registered with a non-EU flag can use the Temporary Admission regime, which, subject to meeting the broader TA conditions, allows them to operate their vessel privately in the EU without the need to import their yacht formally.

It is important to note that VAT laws can vary from country to country, and there are multiple moving parts to consider. For this reason, appropriate professional advice should always be sought. It is also important to keep accurate records of the location and usage of your yacht to avoid any potential penalties or fines from the local authorities.

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❔ How long is the yachting season?

The length of the yachting season can vary depending on the location and type of yacht, and also the type of sailing you are looking for. Some yacht owners may choose to sail in winter or colder weather, while others prefer the summer season.

In general, the yachting season refers to the period when the weather is suitable for recreational boating and when yacht charter companies and marinas are open for business.

In tropical locations, such as the Caribbean or the South Pacific, the yachting season is typically year-round, with the best weather conditions from December to April.

In Mediterranean locations, such as the Greek islands, the Balearic Islands, or the French Riviera, the yachting season is generally from April to October, with the peak season from June to September.

In colder climates, such as the Baltic Sea or New England, the yachting season is usually from May to September.

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❔ What is the difference between owning and chartering a yacht?

If you own a yacht, the asset belongs to you. As an owner, you can subsequently choose to operate the yacht on a commercial (for charter) or pleasure (for private use only) according to your preference or individual needs and requirements.

If you charter a yacht, you effectively pay a fee to rent (charter) a yacht, which belongs to a third party, for an agreed period with a pre-arranged itinerary of where you will cruise whilst on board. Charters are normally for vacation purposes although they can also be used for business trips or events.

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❔ Can a company own a yacht?

Yes, a company can own a yacht. It is highly recommended that a high-value luxury asset like a yacht is not owned by an individual directly.

Instead, it is better to own the yacht through a company or trust structure, which can offer fiscal benefits as well as limitation of liabilities. For more information check out our Yachting Services brochure.

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❔ What is a Certificate of Registry?

A Certificate of Registry, also known as a Registration Certificate, is a legal document that confirms a yacht’s registration with a specific country or jurisdiction.

A Certificate of Registry is required for a yacht to legally operate in the waters of that country or jurisdiction. It is also required to prove the yacht’s nationality, which is important in cases of disputes or accidents.

The certificate includes details of the yacht including its name, registration number, type, length, tonnage, IMO number, and the name of the registered owner. It also states the port of registry and the flag under which the yacht is registered.

It is important to note that a Certificate of Registry is not the same as a Certificate of Survey, which is issued by a classification society and certifies that a yacht meets certain safety and construction standards.

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❔ What is the Temporary Admission Regime?

Temporary Admission (TA) is a customs tax relief regime that permits non-EU owners to use their yachts freely within EU waters for a specific period with full or partial exemption from import duties.

Fundamentally, a non-EU individual with a non-EU owning entity and a non-EU flagged vessel (subject to meeting the broader TA conditions) can operate their vessel privately in the EU under TA without the need to formally import it, therefore avoiding Customs formalities, inevitable import VAT costs and structuring costs associated with EU importations.

Take a look at our Temporary Admission infographic for more information.

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❔ Can I register my yacht in my name?

Yes, it is possible to register your yacht in your name however, each flag state has their qualifying criteria for both individuals and corporates depending on where they are residents and most will have a qualifying owner’s schedule, which lists the accepted jurisdictions of which you should be a citizen.

For individuals resident in a jurisdiction that is not on the qualifying list, ownership via a company incorporated in an accepted jurisdiction will be required to register the yacht.

Other countries may have different requirements for yacht registration, such as proof of residency, tax compliance, and compliance with local maritime laws and regulations. It’s important to check with the relevant authorities in the jurisdiction where the yacht will be registered for specific requirements.

Depending on the size of your yacht, you may wish to consider owning and registering your yacht through a corporate structure. It is recommended that a high-value asset such as a yacht, is better owned through a company, even more so when it is to be engaged in commercial activity, as it provides a layer of confidentiality, offers some form of asset protection and can limit an owner’s liability should there ever be a claim.

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❔ What is a Ship Representative Person?

In several yachting jurisdictions, where the owner of a vessel is not resident or does not have their principal place of business in the jurisdiction of registration, they are required to appoint a Ship Representative Person (or ‘representative person’) in connection with the vessel before they can register it under that jurisdiction’s flag.

The representative person must ordinarily be an individual that is resident in said jurisdiction, or a company incorporated and having a place of business there. The function of the representative person is to enable the flag state in question to serve specific documents about the vessel for which they are appointed, such as notices of de-registration or papers for the institution of, or otherwise in connection with, any criminal or civil proceedings.

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❔ What is the difference between Commercial and Pleasure use?

A commercial yacht is engaged in commercial activity i.e. available for charter by third parties.

A pleasure yacht is used solely for recreational use on a private basis by its owner and their guests.

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❔ Do yachts have to be registered?

In some countries, yacht registration is mandatory, while in others it may be optional and depends on the size of the yacht, where it will be used, and the intended use of the yacht.

For example, in some countries, only yachts used for commercial purposes are required to be registered, while yachts used for recreation may not need to be registered.

It’s important to check with local authorities to find out the specific registration requirements for the country where the yacht will be used and to ensure compliance with maritime laws and regulations.

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❔ How do I register a yacht in Malta?

To register a yacht in Malta, you will need to follow these general steps:

1. Obtain the necessary documents i.e. proof of ownership, a valid certificate of survey or a classification certificate, and proof of your identity.
2. Apply along with the required documents.
3. Pay the fees associated with the registration process i.e. registration fees, tonnage fees and annual fees.
4. Register the yacht – once the application has been reviewed and approved, the yacht will be registered and a certificate of registration issued.

Malta registration is valid for 5 years and will need to be renewed before it expires.

Please note that the above steps are general and may be subject to change and specific requirements may vary depending on the type and size of the yacht and its intended use. We recommend checking with Transport Malta or a local service provider with experience in yacht ownership, registration and administration. For more information on Yachting in Malta and why the Malta flag is so popular, check out our infographic 17 Reasons to Flag your Vessel in Malta.

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❔ How do I register a yacht in the Isle of Man?

As a Red Ensign Category 1 register, the Isle of Man Ship Registry can register vessels of all sizes. It accepts privately operated yachts of any size and yachts used for charter over 24 metres in length.

It has a comprehensive list of over 60 countries for companies or persons qualified for registered ownership. There is a legal requirement for a local representative to be appointed for all vessels over 24 metres registered in the Isle of Man. If the vessel is owned by an Isle of Man body corporate, that entity can be appointed to provide this service. For a foreign-owned vessel, they would need to appoint a local representative to meet this requirement – Sentient International is approved by the Isle of Man Ship Registry as a ‘Representative Person’ and can act for owners and operators in this regard.

The process to register a vessel in the Isle of Man is simple and efficient.

1. Apply in writing for registration with the proposed name of the yacht.
2. Obtain, complete and submit all of the necessary documents and evidence required according to the size and use of the yacht, i.e. declaration and evidence of ownership, declarations of use etc.
3. Where applicable, appoint a representative person.
4. Arrange and obtain the necessary call sign, MMSI Number and Radio licenses.
5. Pay the fees associated with the registration process i.e. registration fees, tonnage fees and annual fees.
6. Register the yacht – once the application has been reviewed and approved, the yacht will be registered and a certificate of registration issued.

Here are our 10 Reasons to Flag your Vessel in the Isle of Man. Get in touch to find out how we can assist you in registering your yacht in the Isle of Man.

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❔ What is the YET scheme?

The Yachts Engaged in Trade (‘YET’) is available to Non-EU resident owners of private yachts over 24 metres that are under temporary admission and registered with the Marshall Islands or the Cayman Islands flag.

It allows the yacht to engage in commercial activities i.e. charter, for up to 84 days per calendar year in French and Monegasque waters without having to pay VAT on the hull. Read our Yachts Engaged in Trade Scheme information sheet for more information.

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❔ Can I charter my yacht anywhere?

Whether or not you can charter your yacht anywhere depends on the laws and regulations of the specific country or jurisdiction in which you plan to charter.

In some countries, chartering a yacht is heavily regulated, while in others it may be more relaxed.

To charter your yacht, you will typically need to meet certain safety and insurance requirements, as well as comply with any local laws and regulations related to chartering, which may include the need for a charter license and registration for VAT in a particular jurisdiction.

It’s important to research and check the local laws and regulations in the specific country or jurisdiction where you plan to charter as they may differ from one to the other. It is also important to note that some countries may have restrictions on foreign-flagged vessels operating in their waters, so it’s important to check with the relevant authorities before chartering your yacht in a foreign country.

If your yacht is owned by an entity that is managed by a corporate service provider or you have a dedicated yacht manager, they should be able to guide you appropriately according to your requirements.

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To find out more about Yachting and the Isle of Man, its role in the global superyacht industry and the opportunities the Island has to offer new and existing owners, contact us on iom@sentientinternational.com or telephone +44 1624 616544.

Useful Links:

Sentient Yachts: Summary of Services

❔ Can a company own an aircraft?

Yes, a company can own an aircraft, and most aircraft ownership structures are usually set up utilising one or more companies. Structuring ownership using a company can often offer fiscal benefits and/or reduce liabilities. To do so effectively it is important to consider how and where the aircraft is to be used to ascertain whether there are any tax or VAT exposures.

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❔ Can I own my aircraft in my name?

Yes, although this is more common with light aircraft rather than executive aircraft due to potential liabilities that may arise through direct ownership. In fact, it is often recommended that high value luxury assets such as an aircraft not be owned in your own name to protect both yourself and your asset.

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❔ What is fractional aircraft ownership?

As the name suggests, fractional ownership simply splits the ownership of an aircraft into shares, or ‘fractions’ as they are commonly referred to. Fractional ownership allows owners to access most of the benefits of owning an aircraft independently, whilst splitting the cost of doing so with their fellow co-owners.

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❔ Can I demo an aircraft before I buy?

In most cases, like test-driving a car, it is possible to demo an aircraft before you opt to purchase.

A demonstration flight will allow you to determine whether the aircraft you are considering is right for you beyond looking at its technical specifications and images. It will enable you to have a first-hand experience of both the interior and exterior condition, as well as the aircraft being utilised in its intended role.

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❔ Owner aircraft leasing, what is it?

Many aircraft ownership structures involve lease or sublease agreements between connected parties. Doing so may present fiscal benefits and form part of an efficient tax or VAT structure.

Before proceeding with any form of ownership structure, it is essential to consider any fiscal benefits but, equally, any potential liabilities or issues that may arise from structuring the ownership a certain way. A professional tax or VAT advisor can help with this aspect of ownership planning.

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❔ What is an aircraft registration number?

Similar to a vehicle registration number, an aircraft registration is a unique code which is specific to a single aircraft and can be used to identify it. Depending on the jurisdiction in which the aircraft is registered, registrations may be numerical, non-numerical or alpha-numerical. Every registry has a unique prefix for aircraft registered, for example, the Isle of Man’s registry prefix is ‘M-‘, followed by four non-numerical characters.

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❔ Can I charter my aircraft to offset costs?

Some jurisdictions allow the commercial operation of aircraft on their registers. For these, it is usually possible to charter your aircraft out to third-party users in order to offset some of your operational costs. However, some jurisdictions do not allow commercial operations, and so this is something to be mindful of in the planning phase of acquiring your aircraft.

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❔ Where should I register my aircraft?

There are many factors to consider when deciding which jurisdiction is best to register your aircraft in. These may include how you intend to use your aircraft, any fiscal benefits, and whether it has a suitable legal and regulatory framework. For more information, check out our guide on ‘Where should I register my aircraft?‘

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❔ What aircraft are eligible for registration in the Isle of Man?

In order to meet the eligibility criteria to be registered in the Isle of Man:

• Aircraft may only be operated for private, corporate or aerial work purposes (commercial air transport operations are not permitted);
• Owners of Isle of Man registered aircraft must meet the ‘Qualified Ownership’ criteria;
• Aircraft must have a maximum take-off weight (MTOW) of 5,700 kg or above – aircraft with a MTOW of less than 5,700kg but greater than 2,730kg may be considered for registration on a case-by-case basis. Aircraft of any weight may be registered if owned by an Isle of Man resident.

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❔ Why register an aircraft in the Isle of Man?

Registering your aircraft in the Isle of Man can offer many benefits. The Isle of Man:

• has an internationally endorsed regulatory system;
• is politically stable;
• is a self-governing Crown Dependency;
• has a low tax regime;
• has no capital gains tax, no inheritance tax, no wealth tax;
• offers a range of financial assistance to businesses;
• is home to an accessible & responsive Government;
• has a European time zone;
• has a strong IT & Telecommunications infrastructure; and
• has a highly skilled and experienced aviation sector.

It is also home to the Isle of Man Aircraft Registry, which is recognised for their:

• high regulatory standards and robust legislative framework;
• award-winning, excellent customer service;
• competitive scheme of charges;
• secure mortgage register and adoption of the Cape Town Convention;
• experienced customer-focused team of professionals facilitating tailored solutions;
• passion for incrementally raising standards of safety and regulation; and
• politically neutral registration prefix, which offers personalisation.

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❔ How long does it take to register an aircraft, and does aircraft registration expire?

The registration process is generally straightforward, and turnaround times depend heavily on the collation, provision and processing times of documentation.
Whilst registrations don’t typically ‘expire’, there are ongoing compliance requirements to keep your registration valid, including the annual renewal of the aircraft’s Certificate of Airworthiness.

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❔ How do I transfer my aircraft registration?

The process to transfer registration varies across jurisdictions and usually involves de-registering an aircraft before allocating the registration to a new aircraft.
However, some registries work on a single-use basis and do not allow the re-allocation of a particular registration. Therefore, it would be necessary to choose an alternative registration when changing aircraft.

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❔ What maintenance does an aircraft require?

Maintenance is essential for many reasons, including ensuring your aircraft is as safe and reliable as it can be and protecting the value of your asset. Maintenance requirements vary from aircraft to aircraft; however, most aircraft will generally require an annual inspection and for commercially operated aircraft, a check-over after every 100 hours of flying it completes. Additional, heavier checks are required at longer intervals, and ongoing light maintenance will be carried out in between, as and when needed.

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❔ How do I import my aircraft into Europe?

If you intend on using your aircraft to, from, or within Europe, you will need to manage exposure to the EU’s Value Added Tax (VAT) and customs duty. Usually, this will involve either full importation of the aircraft or Temporary Admission (TA), depending on the nature of your intended aircraft usage.

The importation or TA procedure is generally very similar regardless of the aircraft’s point of entry into the EU. However, where liable to pay VAT, the rate at which this is payable and whether it is possible to have the VAT reimbursed at a later date will vary depending on a number of circumstances.

As with any tax or VAT aspect, it is always recommended that you obtain the appropriate professional advice to ensure that your aircraft is eligible and its ownership is structured effectively to avoid triggering any VAT liabilities.

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Form more information on aircraft ownership and registration, check out some of our other articles and resources on this subject:

Aviation Services Brochure

Private Jets – How Much do They Really Cost?

Top 10 Tips When Buying a Private Jet

Where Should I Register my Aircraft?

Isle of Man Aircraft Registration – M is for Manx

Malta Aircraft Registration – 9 Reasons to Choose 9H

Aviation in Malta

Looking to establish a #trust but unsure in what jurisdiction? 🤔

There are a variety of places, both onshore & offshore, in which you can set up a trust. But with so many things to consider how do you choose which jurisdiction is right for you?

Our latest slideshow compares 6 key jurisdictions for #TrustEstablishment.

P.S. Don’t forget to obtain the appropriate legal/tax advice before entering into any transactions of this kind.

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Affidavit	A written and signed document made by someone under oath. An affidavit can be used as proof in a court of law.
Arbiter	An individual who acts as judge in an argument and has the authority to settle a dispute.
Asset	Something of value that belongs to an individual or organisation i.e. a possession, property, money, land.
Beneficial Owner	An individual or organisation who has the ultimate ownership or majority control over an entity or asset and has the right to receive income or profits from it.
Beneficiary	An individual or group of individuals that benefit financially or in some other form.
Benefit in Kind	A benefit or perk an employee receives from their employer in addition to their salary i.e. a car, mobile phone.
Bequest	The property or assets that someone, after death, gives to someone else.
Capacity	The ability of an individual to use and understand information to make a decision and communicate a decision made.
Capital	Money or assets used to start a business or invested to produce more wealth.
Capital Gains Tax	A tax applied on profits made from selling something you own i.e. property or investments.
Chattels	An item of personal property in a tangible form (moveable or immovable) i.e. jewellery, cars, antiques.
Civil partner	An individual who enters into a civil partnership with another person with whom they are not related.
Client	An individual to whom an organisation provides, has provided, or intends to provide services to.
Common Reporting Standard	An annual requirement which requires jurisdictions to obtain information from their financial institutions and automatically exchange said information with other jurisdictions.
Creditor	An individual/organisation to whom another individual/organisation owes money.
Custodian	An individual or organisation with responsibility for protecting or taking care of something i.e. holding assets of a trust.
Debtor	An individual/organisation that owes money.
Decedent	A deceased individual.
Deed of Settlement	A legally binding agreement signed by two or more people that settles a dispute and any related claims between them.
Deed of Trust/Declaration of Trust	A legally binding document through which legal title of an asset is transferred to a trustee to be held on trust for the benefit of one or more beneficiaries.
Deed of Variation	A legally binding document, through which changes to a deceased individual’s will may be made by its beneficiaries.
Descendant	An individual that is related to and lives beyond another individual.
Disclaimer	A formal statement that removes connection or legal responsibility for something where one has a right to claim.
Discretionary	Left to individual choice or judgement.
Distribution	Separation and dispersing of funds and/or assets to those entitled to the estate of the diseased.
Domicile	A place that an individual treats as their permanent home, where they live or with which they have a significant connection.
Equity	The value of residual ownership in an organisation or an asset.
Estate	The total money and property of an individual, particularly at death.
Estate plan	A plan or set of instructions that manage an individual’s estate upon their death.
Executor	An individual or organisation appointed with the responsibility to carry out the terms of a will of a deceased individual.
Exoneration	A formal action that absolves someone from blame, a duty or obligation.
Family office	A private owned company that handles the financial affairs of a wealthy family, usually comprising investment management, estate and tax planning and concierge services.
FATCA (Foreign Account Tax Compliance Act)	A law that requires U.S. citizens to declare any financial assets they hold outside of the country.
Fiduciary	An individual or organisation that acts on behalf of and in the best interest of another individual, with a duty to preserve good faith and trust i.e. the relationship between a trustee and a beneficiary.
Gift	Something that is given to a beneficiary (directly or indirectly) as a present, where full consideration is not received in return.
Guardian	An individual who has the legal responsibility of protecting and looking after something or someone.
Heir	An individual legally entitled to the property of an ancestor upon their death.
Income	Total money received from earnings, benefits, property and pensions.
Indemnity	Security or protection against a loss or other financial burden, or legal liability for one’s actions.
In extremis	In an extremely difficult situation or at the point of death.
Inheritance Tax (IHT) also known as Estate Tax	Tax levied on property and money acquired by gift from a deceased individual.
Inter vivos	Between the living.
Intestate	Without a will upon death.
Irrevocable	Something that is final and cannot be changed, reversed or recovered.
Joint Tenancy	Shared ownership of a property where each individual owner has an undivided interest in the property. When an owner dies, the deceased owner’s interest is acquired by the living owner.
Legacy	Money or property left to a beneficiary upon death or a long-lasting impact of a person’s life through their actions or events.
Letter of Wishes	A document that outlines how the settlor of a trust wishes for trust assets to be treated and distributed. Whilst not legally binding, it must be taken into account and in practice, is usually followed by the Trustees.
Liability	Legal responsibility for something.
Minor	An individual under the age of full legal responsibility.
Nil-rate Band	The amount of an individual’s estate which can be passed on to their beneficiaries upon death with no Inheritance Tax payable.
Non-resident	An individual that does not live in a particular place.
Perpetuity Period	A period of time (the length of a life in being plus 21 years) that applies to future interests in assets.
Person with Significant Control (PSC)	An individual that owns or controls a company.
Personalty	An individual’s personal (moveable) property.
Power of Attorney (POA)	Legal permission for a designated individual to act and make decisions about another individual’s property, finances or care.
Probate	The process of proving that the will of a deceased individual is valid.
Property	Possessions belonging to an individual i.e. cash, land, property, luxury assets, shares, investments etc.
Protector	An individual appointed by the settlor of a trust to oversee the administration and decisions made by the trustees in relation to the trust.
Real estate/realty	Land or buildings that an individual owns.
Residency	The principal place where someone lives.
Residue	The remaining estate after all expenses and charges have been paid.
Revocable	Can be changed, revoked or cancelled.
Settlement	The arrangement through which property passes to designated beneficiaries as stipulated by the settlor.
Settlor	An individual who sets up a Trust, where legal ownership of assets is transferred to the Trustee(s) for administration and distribution according to the settlors wishes.
Spouse	The husband or wife of an individual.
Tenancy in common	A legal arrangement in which two or more parties share ownership of a property but where the share does not automatically go to the other owner(s) upon death. The share can be passed on to another party via the will.
Testament	An individual’s will, in particular relating to their personal property.
Testator	An individual who has made a will.
Trust	A legal arrangement by which the owner of an asset transfers its legal ownership to Trustees to hold and administer subject to the defined terms of the Trust Deed and in accordance with the governing law, for the designated beneficiaries.
Trust Administrator	An individual or organisation that is appointed to administer the Trust and its assets. A Trust Administrator may also be appointed by the probate court to oversee a deceased individual’s estate when there is no will.
Trustee	The legal owner of the assets held in a trust. An individual or organisation appointed by the Settlor to administer the trust asset(s) according to the Settlor’s wishes as set out in the Trust Deed.
Trust Service Provider (TSP)	A professional organisation that provides trust administration and trustee services to trusts. Usually licensed by a regulatory body in their jurisdiction.
Ultimate Beneficial Owner (UBO)	An individual that is the ultimate beneficiary of an entity – the individual who ultimately owns and controls the entity.
Will	A legal document that contains instructions for the treatment and care of one’s property or estate upon death.
Witness	An individual who sees an event, or is present at the signing of a document and confirms the same.

The start of a new year is a time for reflection and goal-setting. Many people make resolutions to improve their health, relationships, or careers, but one resolution that is often overlooked is getting your affairs in order.

Here are just a few reasons why this resolution should be at the top of your list in 2023:

1. Peace of mind:

Knowing that your legal documents, finances, and other essential details are in order can bring a sense of calm and security. It can also help you to manage your day-to-day life better and make better decisions.

2. Protecting your loved ones:

If something were to happen to you, your loved ones would be left to deal with the aftermath. By keeping your affairs in order, you can ensure that they are taken care of and that your wishes are respected.

3. Saving money and time:

Having your affairs in order can save your loved ones from costly and time-consuming legal and financial battles. With your legal documents and financial information in order, settling your estate and distributing your assets will be much smoother.

4. Avoiding complications:

If you don’t have your affairs in order, your loved ones may have to guess at your wishes or make decisions for you that may not align with what you would have wanted. By getting your affairs in order, you can avoid complications and ensure that your wishes are respected.

5. Putting your mind in order:

Having your affairs in order means that you can focus on other things, like your health and well-being, your family, or your career, rather than worrying about what will happen if something happens to you.

The Role of a Corporate Services Provider

In addition to the benefits mentioned above, using a trust and corporate service provider (‘TCSP’) can also help to simplify the process of getting your affairs in order. A TCSP is a company that specialises in company formation and trust establishment and provides related services to such entities commonly used in estate and succession planning.

They can provide expert guidance, handle administrative tasks, and offer flexible solutions to meet your requirements and objectives.

Reviewing and updating your legal documents, finances, and other important details will give you and your loved ones peace of mind. Maintaining your affairs is essential in protecting yourself and your loved ones.

It may not be the most exciting resolution, but it is fair to say it should be one of the most important.

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With a heritage going back over 35 years, we can establish companies and trusts in several key global jurisdictions. Our in-depth knowledge and practical experience mean that we are highly proficient in delivering effective solutions for our clients.

We offer a comprehensive range of corporate and trust services, from full-service development through to back-office functionality – leaving you reassured that you are in the hands of a professional and reliable service provider.

❔ How are trusts created?

A trust is an arrangement through which the owner of an asset (known as the Settlor) legally transfers ownership of the asset(s) into the Trust. Trustees subsequently administer the assets subject to the terms of the Trust Deed and in accordance with the Settlors wishes, for the benefit of an individual or group of people, known as Beneficiaries.

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❔ What can be placed in a trust?

You can settle a range of things into a trust but the most common assets, include:

• Cash
• Shares
• Real Estate
• Land
• Luxury assets i.e. yachts, aircraft
• Personal items i.e. art, jewellery, cars
• Investments
• Life Insurance Policies
• Pensions
• Securities

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❔ Do you need a lawyer to set up a trust?

The Trust Deed is a key requirement to setting up a trust. For this reason, it is advisable to engage either a lawyer or a licensed trust service provider who will be able to coordinate the drafting of a Trust Deed, establish the Trust and act as Trustees of the same.

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❔ Do I need an independent Trustee?

A Trustee is an individual or professional service provider with responsibility for administering the assets according to the Settlor’s wishes as set out in their Trust Deed or Will. They are also responsible for the day-to-day management of the Trust, including banking, making distributions, payments of taxes due etc.

An independent Trustee is a professional body with no connection to the Trust. Whilst it is not mandatory, it is highly recommended to have an independent third party act as Trustee, to avoid any potential bias or prejudice that could occur with a family member/friend acting as Trustee.

If engaging an independent Trustee, it is important to ensure that they fully understand their role and responsibilities – a licensed trust service provider is therefore advisable in this instance.

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❔ Is a Protector required?

A Protector is not mandatory for the establishment of a trust but some people prefer to have one appointed. The role of the Protector is to ensure that the Trustees perform their duties accordingly and have powers of veto over Trustee decisions if they do not. Often the Protector will be a close family friend or professional advisor to the individual that is setting up the Trust.

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❔ Why do we need a Trust Deed?

A Trust Deed, also known as a Declaration of Trust, is the legally binding document through which the legal owners of the asset(s) declare that they hold the property on trust for the benefit of one or more Beneficiaries.

The Trust Deed sits at the centre of any trust structure, – it legally protects everybody’s interests and provides the governing rules abided by and overseen by the Trustees.

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❔ Are trusts regulated?

Whilst trusts themselves are unregulated, in certain jurisdictions professional Trustees must often be licensed to provide such services.

For example, professional Trustees in the Isle of Man must hold a Class 5 license under the Financial Services Act 2008 and regulated by the Isle of Man Financial Services Authority; and they must act with due skill, care and diligence when carrying out regulated activities.

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❔ Can trusts be changed?

As the Settlor usually establishes a trust for a specific purpose, certain trusts can be difficult to change, whereas others may be changed at any time.

Where permitted, changes are often made by the Trustees and/or the Protector in accordance with the Trust Deed. Changes may include adding and removing Beneficiaries, retiring and appointing Trustees, extending or reducing the Trust Period; such changes are ordinarily executed by a Supplementary Deed.

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❔ Are trusts considered marital property?

Trusts are considered separate property of the Beneficiary spouse but are subject to dispersal if they contain marital property.

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❔ Are trusts subject to Inheritance Tax?

The type of trust, the jurisdiction in which it is established and how the Beneficiaries stand to benefit from the Trust, will decide to which taxes, rates and allowances it will be subject.

Some property may also be excluded, meaning that no inheritance tax is payable.

Before setting up any structure, it is vital to get the appropriate professional advice to ensure that you are aware of any tax liabilities or implications that may arise.

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For more information on trusts, check out some of our other articles and information:

Trusts: Why Use One?
The Key Components Of A Trust
When Should You Review Your Estate Plan
Isle of Man Trusts

Looks like Father Christmas forgot to deliver a couple of presents this year.

Download one of our printable 2023 calendars below.

For those involved in the Yachting or Aviation sectors, our calendars include some of the key industry events scheduled for 2023 – a good reminder to get next year’s business travel booked.

For everyone else… well just enjoy a free printable calendar on us.

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