Isle of Man Yacht Leasing Update by Chris Allix

In the HM Revenue and Customs Tax Brief 56/09  issued in September 2009, doubt was placed on the future of the Isle of Man Yacht Leasing structure because HMRC contended it was abusive avoidance. However, discussions between the Isle of Man Yacht Forum (Dominion is a member of their VAT committee), the Isle of Man Customs Authority and HMRC, led to concessions and consequently the Isle of Man Customs and Excise Practice Note  issued on 22^nd March 2010  confirmed that all leases in existence on the 14^th September 2009 could continue to the expiry date and in fact any assignment of the lease would  be allowed.

At Isle of Man Yacht Leasing Limited we still contend that the lease structure as administered by us is not abusive avoidance but merely deferral. We are still not allowed to write new business within the lease structure, but we are waiting for the EU ruling in the European Courts of Justice on the HMRC appeal relating to the Weald Case, due shortly, before we decide whether or not to appeal against this ruling. We see no point in winning a battle only to lose the war as the result of a ruling in the European Courts on a separate matter.

We want our existing clients to know that they are actually safer now than before the HMRC Brief 56/09 because they now have the approval not only of the Isle of Man VAT office but also HMRC following the Practice Note dated 22^nd March 2010. We will keep our introducers and readers updated regarding the future of new business once the Weald case has been ruled on and we have had a chance to consider the implications of this ruling.