Industry » Legal & Finance » Q&A Chris Allix: Yacht Ownership and the Trend for Private Use

Q&A Chris Allix: Yacht Ownership and the Trend for Private Use

Dominion Chris Allix Profile2

Dominion Marine, founded by Chris Allix 34 years ago, is one of the leading corporate service providers specialising in providing the setup of tax-efficient superyacht ownership structures.

This is no simple task, requiring expert knowledge and insight into where and how an owner might wish to use their yacht, amidst a legal and fiscal landscape that is constantly evolving.

However, if there’s one person always in the know it’s Chris Allix, so we caught up with him in Monaco to get his views on recent developments and the growing trend towards private use.

OnboardOnline: What’s the first thing you want clients to understand about the role of Dominion Marine?

Chris Allix: Superyachts are enormously valuable assets. How you set up to buy them and how you operate them has significant implications on how much they cost. What we do at Dominion Marine is figure out how and where our clients want to use their yachts, then advise them on how to buy and run them so that they don’t waste money doing things they don’t need to do, and don’t get caught out having done something costly or wrong.

OO: Why does Dominion Marine operate from the Isle of Man?

Allix: The Isle of Man has the right balance of privacy and transparency. Corporate ownership registers don’t publicly list beneficial owners of companies, but every manager within a corporate service provider must know the names and background of the ultimate beneficiaries of their companies.

The truth is that the Isle of Man, Cayman Islands and the Channel Islands are more rigorous in policing their regulations than some of the larger jurisdictions.

Dominion Topaz3

OO: Tax planning for superyacht ownership is notoriously complex and subject to evolving interpretations of laws and regulations so how do owners stay on top of these changes?

Allix: Everyone, no matter their wealth, wants to be smart with their money, however, excessive planning to avoid taxes is seen by the UK and EU governments, and indeed by the public, as wrong-doing. So, for example, the days of private use one week and charter the next are over. That’s what’s called abusive avoidance: using the tax laws to avoid paying taxes. As I always say, ‘Pay unto Caesar something.’

It’s a complex landscape, but one Dominion Marine excels at navigating while keeping our clients’ yacht operations running smoothly. It’s important to be proactive rather than reactive in this industry and the team of experts we have at Dominion ensures just that.

OO: So between the flag state of the yacht, the jurisdiction of ownership and the yacht’s program, how do you ensure an owner gets the best set up?

Allix: Each of the various yacht jurisdictions work hard to provide a competitive service while working within the European tax code. Therefore the best way to ensure the owner can enjoy their yacht the way he or she wants is to understand how they actually want to use it.

We ask: What do they want to do with the yacht? Where will they be using it, how do they want to use it, what kind of yacht is it? These are critical questions and the answers help us to develop ownership structures that support their particular lifestyle.

OO: So when is VAT-paid the best option for a yacht owner?

Allix: No yacht needs to be VAT-paid unless the owner wants it that way, for example, if he or she has no intention of replacing it in later years.

What you need is free circulation which is the state of being able to sail your superyacht freely around EU waters.

Dominion Large yacht 2

OO: In March this year, the EU Tax Directive ended the Malta and Cyprus leasing schemes on the basis that if the lessee eventually owns the yacht it amounts to a lease purchase, as well as the issues concerning the use & enjoyment rules.

Allix: Yes that’s correct, they have been ended.  At the time of this interview the only alternative to paying VAT in full on acquisition of a private superyacht is the Rental Solution in either Monaco or Cyprus. This allows owners of private superyachts to pay VAT on rental payments in line with the depreciated value of the yacht over the duration of the rental period. 

It is likely other jurisdictions will follow suit with our concept and we as a forward thinking business will simply take that as a compliment.

OO: So how are all these changes impacting competition between jurisdictions?

Allix: Malta is currently the most favourable jurisdiction for commercial superyacht ownership structures in my opinion. The Maltese authorities and service providers have invested a lot of time and energy in understanding the needs of superyacht owners and their management companies and, as a result, Malta is the jurisdiction of choice. We opened our Malta division in 2016 and it continues to go from strength to strength.

OO: From an owner’s perspective, how do you ensure the administrative burden doesn’t detract from the enjoyment of the yacht?

Allix: In the end, all of this comes down to keeping the owners happy and allowing them to enjoy their yachts worry-free. The changing tax landscape has without doubt had an impact: About half the vessels in our Dominion Marine fleet are now operating privately, up from 35% a decade ago, simply because of ever-changing regulations that affect superyachts that charter.

Yachting is about escape, privacy, freedom, fun. Going private and using rental agreements to defer the VAT is a simpler way to operate for an increasing number of our owners. What we do is ensure that no matter how they want to operate their yacht, we have the best possible solution for them.

Superyachts are valuable assets that are complex to build, buy, own and run. We do everything we can to make it as easy as possible for owners to enjoy the incredible lifestyle that these vessels offer.

Related articles: 

What is Meant by ‘Use and Enjoyment’ of a Yacht?
Alternative Solution to TAR (Temporary Admission Relief)
Dominion Marine: Shaping the Future of Yacht Ownership
Dominion Marine - The Monaco Solution

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