• “How easy would it be to charter my yacht for a few weeks each year?”
• “Can I charter my yacht to friends and family?”
• “I’d like to generate some income to help offset ownership costs – can I charter my yacht?”

Please note that Oceanskies is a yacht registration and documentation agency. We are not legal or tax advisors, and nothing in this article should be considered formal advice. We always recommend that clients considering charter should seek appropriate professional guidance tailored to their individual circumstances.

To make your yacht legally available for charter, the following conditions must be met:

• The yacht must be commercially registered
• The yacht must be in “free circulation”
• The owning company must be VAT registered in every country where the yacht is offered for charter
• The owning company and yacht must comply with all applicable local regulations, including the need for charter licences where required
• All guest usage must take place under a formal charter agreement

Some yacht owners view chartering as a way to achieve VAT efficiencies. However, authorities are increasingly alert to arrangements that are designed primarily for VAT advantages without genuine commercial activity.

The United Kingdom’s HMRC has highlighted a number of factors that may indicate an abusive structure, including (but not limited to):

If challenged, such structures may be deemed abusive and could result in penalties, fines or more severe punishment.