Commentary

RCB/11/07 Tax risk—yacht purpose

Part V16 Forms and other HMRC material

RCB/11/07 Tax risk—yacht purpose

RCB/11/07 Tax risk—yacht purpose

Revenue & Customs Brief, Issue 11. 7 February 2007

We are aware that various advisors are promoting VAT schemes through which private individuals incur little or no VAT on the purchase of pleasure craft (both sailing and motor vessels), particularly at the top end of the market.

The purpose of this Brief is to describe the key features of the schemes and to announce that we have serious concerns about the validity of the VAT treatment which is claimed for the schemes.

Under the schemes, the user acquires a new vessel which purportedly has “VAT paid” status while, in

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