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IOM Yacht Forum Welcomes Clarification On Input Tax Deduction

Friday, February 12, 2010

The Isle of Man Yacht Forum has announced that following tripartite meetings with the Isle of Man Customs and Excise (IoMCE) and the UK's HM Revenue and Customs (HMRC), there has been changes in the VAT treatment of yacht chartering or leasing activity that will be beneficial to the island’s yachting industry.

The talks on February 3 by representatives of the Forum, the IoMCE and HMRC focused around Revenue & Customs Brief 56/09, which sets out guidance on possible indicators of abusive practice. HMRC clarified that provided clear evidence exists of earnestly pursued chartering to third parties, which meets the business test and the criteria for economic activity (described within section 2 of the guidance), then there is a legitimate right to recover input tax on the business asset(s), subject to the usual rules for input tax recovery. Therefore, provided those conditions are met, no uncertainty should be created if a yacht is also used by the person who is the funder or ultimate owner of the chartering entity.

A spokesman for the Isle of Man Customs and Excise, commented: "The message to the industry is simple; examine the third party chartering activity. If this stands up as an economic activity earnestly pursued and can be so evidenced then Customs will not seek to apply the abuse principle. What cannot be tolerated is sole use of a yacht by the person who is the funder or ultimate owner of the chartering entity".

Speaking on behalf of the Forum, Chairman, Robert Tobin added: “As a result of these recent meetings much needed clarity has been agreed and provided on HMRC Brief 56/09. This is indeed welcome news from IoMCE and provides certainty for those involved in the business of owning and chartering commercially managed yachts.”

“The excellent cooperation and support of HMRC and IoMCE is further proof of the value of conducting chartering businesses in a well regulated, responsible and progressive business environment such as the Isle of Man. The meetings provided an ideal opportunity to illustrate the positive economic benefit to the UK the yachting industry provides and garner the recognition it deserves.”

“There is a further commitment from all parties to continue this dialogue about yacht leasing structures. There is much still to be done, but the achievements so far at governmental level, are worthy of significant praise.”

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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