With shipyards bulging with orders for new yachts, there is expected to be an explosion of deliveries in 2022 and 2023. Issues arise well before delivery and Sarnia Yachts has been busy assisting Family Offices, Owner’s Reps and other advisors to ensure these considerations are adequately addressed at an early stage as they take significantly longer to correct later on in the process.
Sarnia Yachts recently incorporated a Guernsey company, the shareholder of which is a firm of Jersey Trustees acting as trustee of a Jersey trust. The beneficiary of the trust is a UK resident individual and the Jersey trust forms part of the beneficiary’s wider UK tax planning arrangements. The Trustee therefore required support from a specialist in the superyacht industry with experience in Ownership, Yacht Management and Crew Management.
The company has entered into a new yacht build contract with an Italian shipyard and appointed a project manager to oversee the build. The early stage payments have already been made through the company’s bank account, in conjunction with the milestones stipulated in the contract. Given the beneficiary’s tax arrangements, it is important the stage payments come from the contracting company and not from another source, and Sarnia Yachts are used to ensuring this.
At this early stage, it has not been decided whether the yacht will operate commercially or not. If the decision is made to operate commercially the current company may need to be replaced later in the build timeline with a more appropriate vehicle. Should this happen the build contract would be assigned to a new vehicle prior to delivery.
Currently Sarnia Yachts is advising the beneficiary with regards to the VAT treatment of various items being purchased directly and not as part of the build contract including tenders, equipment and furnishings.
Nearer the delivery date Sarnia Yachts will assist the Trustees and beneficiary of the Trust by employing those crew who need to be at the shipyard to familiarise and oversee the yacht’s systems and engineering elements prior to delivery. It will be critical that the appropriate pre-delivery insurance is put in place at this time to protect those crew and the yard. Sarnia Yachts’ inhouse Yacht Insurance manager will assist the Directors with sourcing the policy.
Sarnia Yachts is also poised to provide a range of operational management services post-delivery in 2023.