Equiom team on course for the future
Tuesday 18 July 2017
Equiom’s Yachting and Aviation team has a combined 150 years of experience, a 20-strong team in the Isle of Man with a further 10 in various locations across the globe. Some of the Isle of Man team explore the industry and how it is shaping the future for service providers worldwide.
Rachel Purnell, VAT Manager
Richard McGlashan, Assistant Manager – VAT
David Precott, VAT Consultant
Describe the current state of the yachting and aviation market, what are the opportunities?
Steve Cain – It is an interesting time for yachting as the market continues to trend upward. There were 370 superyachts sold in 2016 with a total asking price of €3.37Bn and the largest yacht sold was 98 metres. This trend is set to expand with a growing demand for ever-larger yachts. This is interesting for Isle of Man based service providers like Equiom because there is a continued demand for yacht owners looking to register their yacht on British Red Ensign flags. Owners of Isle of Man flagged vessels can take advantage of the prestige of the local ship registry and the efficiency of specialist service providers. With the average cost of a 100m+ superyacht at €242M, someone purchasing a yacht will face a considerable amount of VAT, but by using a service provider like Equiom, they can manage that cost through a bespoke multi-jurisdictional structure.
Captain John Hills – The focus for aircraft manufacturers is on more efficient aircraft with an increasing range of equipment. Where aircraft used to have add-on options for equipment and ‘nice-to-haves’ like synthetic vision, they are now beginning to make the aircraft with this equipment already built in to meet the new demands of the discerning aircraft customer. So this has changed the purchasing process for would-be owners who now have an improved choice of aircraft and less add-on costs.
What services do you offer specifically?
Lisa Ward – Our job is to create efficiencies for transactions and ongoing administration associated with yachts and aircrafts. We liaise with the relevant parties, including brokers, aircraft operators, captains, surveyors, shipyards, manufacturers and suppliers, to provide ongoing support to clients. Such support can include one-off services such as ad-hoc registration of a yacht or aircraft, or purchase or sale advice, or management of the entire process of buying, operating and selling a yacht or aircraft from start to finish. The buying and selling services include VAT and Customs advisory and compliance, registration options and arranging insurance cover. On the administration side, we manage everything from payroll and benefits for crew members to accounting and financial reporting. We can also help with managing yacht charters in several different jurisdictions.
Rachel Purnell - At Equiom we are fortunate to have Authorised Economic Operator (AEO) status, which enables us to provide certain benefits to clients in the yachting and aviation customs process, such as fast-tracked paperwork and fewer customs checks. We have a good relationship with the Isle of Man Ship and Aircraft Registry and Isle of Man Customs and Excise department and benefit from our location in a well-regulated, robust jurisdiction.
Where does the majority of your business come from?
Edward Leigh - We see repeat business in particular from aircraft operators and brokers who may have a new aircraft or new client in need of our services. The geographic location of our clients was historically Europe, especially in the Mediterranean but we are increasingly getting business from areas like the Middle East, the US and Russia.
We manage all types of vessel and aircraft including new and used. We currently have $4Bn yachting and aviation assets under management and that includes helicopters, motor and sailing yachts and various Airbus and Boeing aircraft.
How have the services you offer evolved over the years?
Ayuk Ntuiabane – Yachting and aviation services have changed a lot over the years. The reason for this is increased regulation both in the Isle of Man and in the other jurisdictions in which we operate. The complexity around VAT has increased considerably and there have been a number of changes in the local regulations surrounding yachts and aircrafts, including a new registration rule for aircraft of a certain weight. Regulations abroad have been equally emergent and the industry has been met with new requirements particularly associated with the growing yachting destination, Croatia. Some of these new regulations have meant that we have had to review our clients’ current structures.
David Precott - As an example of this, we have just recently introduced a new structure for clients chartering their yacht in Spain. This was introduced in response to Spain’s strict tax regime for yacht charters which incurred a VAT charge of 21% plus a Spanish Withholding Tax of 24.75%. For many of our clients it just wasn’t viable to charter a yacht in Spain because of these costs and our new structure helps to manage that.
Richard McGlashan – We have been assessing the impact of Brexit on a number of our service lines, not least yachting and aviation. The biggest area of impact on these industries is likely to be VAT and it is difficult to know what lies ahead for the sector and the Isle of Man as a jurisdiction.
Edward Leigh - Our commitment to exhibiting year on year at all of the major industry events such as EBACE and the upcoming Monaco Yacht Show demonstrates our confidence in the market and ensures we keep up to date with the sector trends.
With $4Bn in assets under management, we are one of the largest yachting and aviation teams in the corporate service sector globally and that is why some of the world’s most prestigious yacht and aircraft owners come to us. There are plenty of opportunities in the sector and we are here to offer advice and guidance every step of the way.