top of page

Leasing

Overview

22 October 2020

Last revised

minutes

2

Reading time

While the lender retains so much security, it also retains liability as registered owner, so it’s perhaps not surprising that pure leasing isn’t more popular. It does form the basis of various VAT-reduction and deferment schemes.

minutes

2

Reading time

22 October 2020

Last revised

While the lender retains so much security, it also retains liability as registered owner, so it’s perhaps not surprising that pure leasing isn’t more popular. It does form the basis of various VAT-reduction and deferment schemes.

  • The arrangement involves a bank or leasing company (lessor) buying a yacht and becoming its legal owner.

  • The lessor then bareboat charters the yacht to the lessee (owner) for an agreed period of time.

  • The lessee pays instalments equivalent to the full value of the yacht plus a return on capital instead of interest on a loan.

  • The lessee is considered the regulatory owner of the yacht.

  • The lessee has exclusive possession and control of the yacht and must keep it in good working order.

  • Insurance against loss or damage is the lessee's responsibility.

  • The lessee is entitled to the warranties provided by the yard.

  • The lessor is indemnified against liabilities related to being the registered owner.

  • The lessee cannot sell the yacht as they do not own it.

  • To terminate the lease, the lessee must pay the remaining instalments or a cancellation fee.

  • The lessee has exclusive possession and control of the yacht and must keep it in good working order.

  • Insurance against loss or damage is the lessee's responsibility.

  • The lessee is entitled to the warranties provided by the yard.

  • The lessor is indemnified against liabilities related to being the registered owner.

  • The lessee cannot sell the yacht as they do not own it.

  • To terminate the lease, the lessee must pay the remaining instalments or a cancellation fee.