knowledge base

buying a boat does not need to be daunting

At Michael Schmidt & Partner, we pride ourselves in making sure the boat buying process is stress-free and as enjoyable as possible. 

If you are unsure about any aspect of the process, please do not hesitate to get in touch. We have put together this guide to help you confidently and knowledgeably, purchase your first or next boat.

Click on the list below to jump to the relevant section. 

what is the buying process?

why should you use an accredited yacht broker to buy a boat?

Buying a yacht can be a fairly daunting prospect, even for those who have done so several times.  There are numerous aspects which must be completed accurately to protect the purchaser from various potential pitfalls:-
  • Is the paperwork in order to transfer title securely and legally?

  • Is there outstanding finance, which needs to be settled in order to be able to transfer ownership? 

  • Does the boat comply with the regulations in the area of its intended use?

  • What is the VAT status of the boat?

An accredited broker can not only give you confidence in the critical aspects above, but can also offer advice on marine finance, insurance, survey reports, berthing and much more.

As the sums of money involved are often considerable, it is important that the broker has a ring-fenced client account available to hold the funds, whilst the transaction progresses.

If you are looking to buy a boat and would like to chat through the process, please call one of our team.  Yacht broking is our passion and we are very happy to help, even if the boat you have your eye on is not one of our listings.

yacht VAT

The issue of VAT on yachts can be a complex area. However, there are a few basics that are quite easy to understand without needing a professional accountancy qualification!

The below is not intended as specific tax advice and we always recommend discussing with your broker and, if necessary, your accountant if you are unsure of your current tax position or residency status.

If you are a UK resident and want to own and use a boat within UK waters, then it must be able to demonstrate “UK VAT Paid Status” (often referred to as VPS) – essentially proving that VAT has been paid on that vessel. This is most often demonstrated by an original VAT invoice from a Dealer to the first owner of the Yacht, clearly showing VAT as having been charged at the prevailing rate when the boat was new, but there are other ways to demonstrate a valid VPS.

If either a boat you are selling, or a boat you are looking to buy does not have a valid VPS, then VAT will need to be accounted for at the point of sale. All our boat listings will be either advertised as “Tax Paid” or “Tax Not Paid”, so you are aware from the outset if this should be factored into the offer price.

Our team of ABYA Brokers are all trained to review and assess the VAT paperwork and will be able to explain to you the VAT status of the boat you are looking at. We also have direct relationships with HMRC’s Yacht Team to discuss specific situations.

The recent occurrence of Brexit of the 31st December 2020 has resulted in some changes of how both UK and EU vessels are treated from a VAT perspective, and as part of our brokerage service, we will offer a full review of your VAT documentation to give both the buyer and seller confidence in the VAT status of the vessel.

New customs and VAT changes affecting boat owners from 1st January 2022 have been officially announced by HMRC

HMRC has now confirmed that from the 1st January 2022, boats returning to the UK, which ordinarily qualify for Returns Goods Relief, will not be required to pay a second amount of UK VAT even if their vessel has been outside the UK for more than three years.

Returned Goods Relief:
Returned Goods Relief (often called "RGR") was previously in place for qualifying UK VAT Paid Vessels that had exited UK waters and then returned after a period of time. However, there was a statutory three-year time limit, meaning if vessels exceeded the three years, the vessel would effectively lose its UK VAT Paid Status.

From 1st January 2022, legislation has been brought in to give certainty to boat owners that they will not be required to pay a second amount of UK VAT because their vessels have been outside the UK for more than three years. Boat owners returning their vessels to the UK can claim relief from import VAT under the Returned Goods Relief if they meet all the conditions for the relief, regardless of the length of time spent outside of UK waters.

Katherine Green and Sophie Dean, HMRC Directors General, Borders and Trade, said, "We are pleased to be able to provide assurance to the sector that there will be no requirement to pay a second amount of UK VAT if vessels have been outside the UK for more than three years." 

It is essential to note the vessel must still qualify under the standard RGR rules – it must have been to the UK at some point under the current ownership, so boats that have left the UK and been sold in the EU or elsewhere will still not qualify. It is also essential to prove evidence of the boat being located in the UK – paperwork such as berthing invoices, electronic data logs or transport invoices will all support a claim for RGR if challenged by HMRC.

Brexit and VAT are reasonably complex subjects, and many different scenarios may impact the ability to claim RGR on a returning vessel. Although we are not tax advisors, and in complex cases, we may recommend you seek professional advice. Please do get in touch if you would like to discuss bringing a boat back to the UK. 

what is ce/rcd and does it matter?

As with most products on the market a boat needs to comply with the relevant standards for the area in which it is intended to be used and, as importantly, bought and sold.

All watercraft built since the 16th June 1998 and intended for sport and leisure use may only be placed on the market, or put into service in the UK and EU if it can be demonstrated that it complies with the essential requirements specified in the Recreational Craft Directive (RCD).  This is known as conformity assessment.

Compliance with RCD is normally demonstrated by a CE Certificate and this is now an essential part of the ships papers.  If it is not possible to demonstrate that the boat complies with the RCD it is illegal to offer it for sale in the UK and EU.

As part of the Brexit process, the UK will introduce its own compliance criteria which will be known as UKCA and will take effect from the 1st January 2022.  It is expected that the CE (European) and UKCA requirements will be very closely matched and further details are expected.

As part of the process of assessing a boat for sale, a professional broker will request to see evidence of the RCD compliance proof, along with the ships papers.  Not only does this allow them to legally offer the boat for sale, but also that title can be legally transferred to the new owner when the time comes.

If you have further questions regarding the paperwork required to Sell Your Yacht in the UK/EU please get in touch.

If you are new to UKCA markings the best place to start is the UK Government website

Read the UK Government guide on UKCA markings: New Products Markings Conformity FAQs

Surveys and sea trials

Having a survey on any vessel that you are looking to buy is a very important part of the process and one of the most commonly stipulated conditions when an offer is made.

The main purpose of a survey is to assess whether a boat has any structural defects, which can be caused by grounding, impact or even a manufacturing fault, which comes to light after time on the water. In addition, a surveyor will inspect and test as much of the equipment installed on the boat as possible.  This can include navigation instruments, heating systems, electrical systems (including battery condition), gas system safety, hatch seals and much more.

There will also be aspects that a surveyor is unable to check during a survey, such as detailed rig checks and in-depth engine inspections.  It may in some cases be appropriate to appoint a specialist rigging company to carry out a full rig inspection and a marine engineer to give a full assessment of the engine(s) in order to have the full picture.

In order to carry out a survey the boat will need to be lifted ashore if it is not already out of the water.  Any costs associated with having the survey carried out will fall to the purchaser.  It is worth noting that most marinas will not allow people to climb a rig with the boat ashore, so if you are planning to include a rig inspection, this should be taken into account.

Although it is relatively unusual for a sailing yacht to have a sea trial, it is of particular importance for a motor yacht as the engines are a significant proportion of the value of the craft.  As with a survey, any associated costs such as a skipper and fuel to achieve a sea trial would be a cost borne by the prospective purchaser.

Once you have your written survey report, it is a good opportunity to sit down with the broker to discuss your position.  It is generally considered that all equipment onboard a boat should function as intended and that the cosmetic condition is in line with the age and amount of use the boat has had.

In normal circumstances, it would be reasonable to expect any genuine faults to either be rectified by the vendor, or an appropriate price reduction to accommodate it.

Importantly as you would have stipulated that your offer was subject to a survey (and indeed any other form of inspection), you retain the opportunity to walk away from the purchase  and request that your deposit is returned.  It is however the responsibility of the purchaser to return the boat to both the position and condition in which it was prior to inspection.  As an example, if the boat has been launched for a sea trial it would be necessary to have it lifted back out prior to being released from the agreement.

Due to a conflict of interests, it is not possible for a broker to recommend a surveyor but they will often have a list of surveyors who are accredited by the industry body and specialise in the type of boat being bought.

client accounts

When the sale and purchase of a boat is handled by a Broker, one of their many roles is to safely handle the money side of the deal and ensure funds reach the vendor at the conclusion of the transaction. In return, the buyer can have confidence that in return for parting with their hard-earned funds, they will receive full and clear title to their new boat.

Key to this is the use of a “Client Account” which is a special bank account nominated by the Broker that is ring-fenced from the other normal day-to-day trading bank accounts of the brokerage company. Whilst the broker will control this account, any funds held within this account are not classed as the assets of the brokerage company, and therefore cannot be claimed by any third party in the event of legal or administrative proceedings.

All ABYA Brokers should operate a valid and up-to-date Client Account and will be able to provide a document proving this.

What proof of ownership will I receive when I buy a boat?

When a boat changes hands, the transfer of ownership is processed through a bill of sale, supported by the vessel’s title documentation.  This can vary from country to country but ultimately it is the responsibility of the broker to ensure that sufficient paperwork is available in order to successfully and legally transfer ownership from seller to buyer.

Upon listing a boat for sale the broker should request to see the title documentation in order to be confident that title can legally be transferred, prior to offering it on the open market.

Aside from certain circumstances, the title paperwork will incorporate a Builders Certificate, which is produced by the builder at the point of build completion and is made in favour of the initial purchaser or supplying dealership.

A bill of sale, or in the case of multiple ownerships bills of sale(s) will document the history of ownership and subsequent transfers.  A boat is made up of 64 shares and it is important that all shares can be transferred on completion of the sale.

The VAT status of the boat should be ascertained as this can have an impact on the value of the boat to the tune of the VAT level in the country it is being sold. The physical location that a boat is being sold can also impact the VAT status, which is something a professional broker can offer an insight to.

The boat's compliance to various standards is also a key aspect as it can only be legally sold if it adheres to the standards required in the area it is intended to be used.  In Europe, this is the CE/RCD and a boat must have proof of compliance and therefore the CE/RCD certificate is a key part of the title documentation.

If you are looking to Sell Your Boat and you would like us to look through the paperwork you have available, we would be very happy to do so.



Once you have a completion date set for the purchase of your new boat, it is essential to have the appropriate insurance cover in place.  Most insurance cover will start and end at midnight and therefore should come into effect on the appropriate day.  Your yacht broker should check with you that you have this in place prior to completing the sale, so that the cover is seamless.

As with all insurance cover, it is well worth taking the time to ensure the cover, not only includes the sea area you plan to sail in and the mooring type you intend to have, but also how other aspects such as longer “out of normal area” trips, road transportation, ashore storage and any specific exclusions such as racing are viewed.

Insurers will each specialise in different aspects of cover and therefore it is sensible to discuss your cover with an experienced broker, who can work with a panel of insurers to offer you the best solution for your type of boat and planned sailing.

Broadly speaking a UK based boat will have an annual premium in the region of 0.5% of the current boat value and nearer 0.75% for boats in the Mediterranean.  Specific inclusions such as delivery trips, racing, out of area sailing and winter Biscay crossings will often be charged as an additional cost to the standard cover as they may be required in one year and not the next.

If you would like to be pointed in the right direction for a suitable insurance broker, please get in touch.

marine finance

Marine mortgages or boat loans are available from a variety of different lenders who specialise in the marine market.  The boat generally becomes the collateral for the loan and in most cases the lender will require a lien to be taken out over the boat to register their financial interest until it is settled.

In general the maximum term for the loan is 15 years and usually with a minimum deposit of 30%.  The age of the boat is relevant as most lenders will have a maximum age that the boat should not have exceeded at the end of the loan term.  This is particularly relevant if you are looking to buy an older boat. 

Most marine mortgages offer an appealing level of flexibility allowing over payments and complete early re-payment without incurring penalties.  This can be of particular benefit if a lump of money is due in the future and the loan can help to get you on the water sooner.

When you are buying a boat, the broker will endeavour to ascertain whether a boat has any outstanding finance and would settle this from the sale proceeds to ensure the boat is unencumbered when ownership transfers to the new owner. 

If you would like further information, or have any questions regarding boat finance, please get in touch.

why should you use an accredited yacht broker to sell your boat?

As a seller, the work of a Yacht Broker can be of even greater benefit by helping you to achieve the best market value, transfer ownership legally and securely and the protection of a secure client account service.

Initially, the work starts with a full market appraisal.  Ideally, you would find a Boat Broker who has recently sold a boat of the same age and model, as this is the most up to date real-world information available. Most professional Yacht Brokers will have access to a worldwide database of recent sale information in order to be able to give you an in-depth insight into the current market.

There are numerous Boat Selling Websites where a Boat Broker should list your boat for sale to reach the maximum number of potential buyers, as you would expect this is a critical aspect to achieve the highest sale price and these Yacht Selling Websites are only available to professional Yacht Brokers.

Once a potential buyer is found, it is the job of the Boat Broker to guide them through the process of viewing, survey, VAT & RCD status, title paperwork and ultimately completion.  There are plenty of opportunities for a potential buyer to fall by the wayside and it is often the experience and reassurance offered by a professional Yacht Broker, which gives the buyer the confidence to complete the purchase.

If you have a Boat To Sell and would like to discuss the process, we would be more than happy to chat it through with you.

How much is my boat worth?

In general, there are not enough boats bought and sold in order to be able to gather the kind of data available to offer the accuracy the car industry can.  Having said that, a professional broker who is immersed in boat sales on a daily basis can offer a fairly accurate market appraisal.

Ideally, if a broker has sold a boat of the same make and model recently, they will be able to offer some up to date information, which is invaluable.  They may well also have potential buyers, who missed out on the one sold recently.

A professional broker also has access to a database of worldwide sales records, which details the recorded sale prices, length of time to sell and the difference between the initial asking price and ultimate sale price, amongst other useful information.  This will allow a fairly accurate market appraisal to be achieved.

Naturally specification, engine hours and condition will have an impact on the market value, which will all be taken into consideration.

As with a property sale, the presentation of the boat is key to achieving the very best sale price.  It is often very well worthwhile investing some money at the point of listing, in order to achieve considerably more at the eventual sale price.

If you would like a market appraisal for your current boat, please get in touch with your nearest office.

request a market appraisal for your boat

Please either contact your local office or complete the enquiry form below and we will get back to you


Tel: 02380 455714


Tel: 01475 529975

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