Limited company buying a boat

[IBC1]

Hello everyone,

I hope all you are fine and can help.

Can a UK limited company buy a boat in Italy ?

I run my own company in London and I have from many years a boat in Italy, a small boat that I would sell to my company. Logically it would be a real money transaction.

Regards

Paul

 

[Mitchells Bristol]

Hi there - yes a limited company can buy a boat (subject to Italian boat holding laws!). What would be the logic/thinking behind it?

 

[UK Contractor Accountant]

Will the company be hiring out the boat or will it be for personal use?

 

[UK Contractor Accountant]

If your existing company bought the boat and you had sole/exclusive use of it you would be taxed on a benefit-in-kind calculated at 20% of the annual “value” of the boat.

The ‘annual value' is equal to its market value when it was first used to provide a benefit.

 

[Mitchells Bristol]

If your existing company bought the boat and you had sole/exclusive use of it you would be taxed on a benefit-in-kind calculated at 20% of the annual “value” of the boat.

The ‘annual value' is equal to its market value when it was first used to provide a benefit.

Might this then be classified as an overseas property exempt from the BIK charge!!

 

[UK Contractor Accountant]

only thought that related to bricks & mortor - holiday homes abroad

 

[IBC1]

Thank you for your prompt replies. The boat is owned from my mum now; she wants transfer the ownership to me. Living in UK and running my Ltd company, I tought to buy the boat with the company.

Does it work ?

Then using it personally or hiring; considering the boat is in Italy and I could use it few times, I was thinking to hire to third parties and to my self.

Is the above workable ? What do you suggest ?

Regards

Paul

 

[IBC1]

anyone can help ?

 

[Mitchells Bristol]

A few issues to consider:

1) Will you pay the market rate for staying on the boat yourself? If not, you need to check the benefit-in-kind rules to see whether the overseas property exemption would apply;

2) You need to consider the impact it will have on the company's status for capital taxes. For example if the company is classed as a trading company now, will this be jeopardised by introducing an investment asset, potentially therefore losing Entrepreneurs Relief (capital gains tax) or Business Property Relief (inheritance tax)

Definitely worth running it by your accountant to ensure it is properly researched before proceeding, but on the face of it, seems possible

 

[Scalloway]

I would think you would need to look into Italian laws about hiring out boats. Do you need a a qualified skipper? Registration with the Italian version of the Maritime and Coastguard Agency? etc.

 

[UK Contractor Accountant]

As previosly mentioned you will need to incorporate the boat as part of the trading business of the company - charter business.

That way it will be regarded as a seperate trade with all associated costs allowable as trading expenses & vat claimable. This will
also negate the problem of losing capital taxes relief mentioned by taxonomy above.

You will still have the BIK rules on the private use of the boat.

 

[UK Contractor Accountant]

Alternatively bring the boat back to the UK and use as a floating office!!!!!!