The guide to Superyacht law - Fourth edition

BREXIT Since the UK voted to leave the EU in June 2016, we cannot conceive of circumstances where a Brexit will not happen without there being a major constitutional crisis. The details behind the UK’s exit are very much unknown. Regardless of what negotiations take place, it is clear that UK nationals and UK businesses working in the superyacht space will need to adjust to the new reality. The only certainty we have is that things will change, so until we knowmore about what the new normal will look like, it is worth bearing in mind that there will be implications for you to consider, and some questions to be mindful of: • Will Brexit see the end of the customs union between the UK and the EU? • What future will the Isle of Man have, where historically it has been part of the fabric of the superyacht space? • What will happen to the superyachts that are operating under the former Isle of Man lease scheme and the current VAT deferral structure? • Will the VAT ‘accounted for’ status in the Isle of Man be wiped out after exit from the EU on the deferral superyachts? • Will tax paid UK flagged superyachts be allowed to rely on their VAT paid status to continue to operate in the EU and will they be allowed to transfer that status on a sale within the EU? • Will the status of the UK Red Ensign be that of a foreign flag with no right to operate commercially in EU waters? Or will the current system of not enforcing cabotage rights continue, allowing UK, Cayman Islands and other flags to operate commercially. Will Spain treat Gibraltar flagged superyachts differently? • Will UK based owners with Red Ensign flagged superyachts be able to benefit from the temporary importation regime – 18 months free passage in the EU without having to buy into any tax structure or operate commercially?

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