Personal ownership
Personal ownership is the default — the yacht is registered directly in the buyer's name, and the buyer is the legal and beneficial owner. It is the simplest structure to establish, the easiest for lenders to assess, the most straightforward for insurance, and the least expensive to maintain. There are no corporate filings, no annual accounts, and no additional administrative costs.
For most private yacht buyers, personal ownership is the correct structure. The only meaningful limitation is that it precludes the Malta or French leasing structures for VAT reduction — those require an intermediary company. For buyers who do not need a leasing structure, this limitation is irrelevant.
Company ownership
Company ownership means the yacht is owned by a legal entity rather than an individual. That entity could be an existing trading company, a holding company, or a purpose-built SPV. In each case, the company is the legal owner of the vessel.
Business owners frequently consider this route hoping it will create tax efficiencies. In most cases for privately used vessels, it does not — and it often creates the opposite. The tax treatment of personal use of a company asset is unfavourable in most jurisdictions, and the financing process becomes more complex.
Tax treatment compared
| Tax area | Personal ownership | Company ownership |
|---|---|---|
| Purchase tax | None (SDLT not applicable to boats) | None |
| Running costs | Not deductible — personal expense | Deductible only if business use |
| Private use benefit | No charge — you own it personally | Benefit-in-kind charge on private use |
| Capital gains on sale | CGT if gain — private yacht often exempt | Corporation tax on gain |
| Inheritance planning | Part of personal estate | SPV shares may be more easily transferred |
Benefit-in-kind on private use
This is the most significant tax issue with company ownership of a privately used yacht. In the UK, HMRC charges income tax on the benefit of using a company asset privately. For yachts, the charge is calculated at 20% of the vessel's market value per year.
On a £600,000 yacht, the annual benefit-in-kind charge is £120,000. At a 45% income tax rate, the personal tax cost is £54,000 per year — simply for having the use of the vessel. Over five years, this is £270,000 in additional personal taxation. This typically dwarfs any corporation tax relief on the running costs.
Similar rules apply across EU member states. The specific calculation methodology varies, but the principle — that private use of a company asset generates taxable income for the user — is consistent.
For a full analysis of when company ownership genuinely works (and when it doesn't), see the guide to buying a yacht through a company.
VAT compared
| VAT aspect | Personal ownership | Company / SPV ownership |
|---|---|---|
| VAT on purchase | Full standard rate | Full rate — OR leasing structure available |
| VAT recovery | Not available | Available for genuine commercial use only |
| Leasing structure | Not available | Available via Malta or French SPV |
| Private use restriction | N/A | Blocks recovery if private use present |
The VAT leasing structure — primarily the Malta leasing arrangement — is the one genuine tax advantage of the corporate structure for many EU-based yacht buyers. But it requires a purpose-built SPV, not an existing trading company, and the vessel must be primarily used in EU waters for the structure to be relevant.
Financing compared
| Financing aspect | Personal ownership | Company ownership |
|---|---|---|
| Lender acceptance | Universal | Clean SPV accepted; trading company more complex |
| Documentation | Personal financials | Corporate documents + personal guarantee |
| LTV | Up to 70% | Similar for clean SPV; may be lower for complex entities |
| Process complexity | Low | Higher — corporate legal work required |
Company vs SPV — an important distinction
If corporate ownership is required — for VAT leasing or other reasons — the right vehicle is almost always a purpose-built SPV rather than an existing trading company. An SPV is a company created solely to own the yacht: no other assets, no other liabilities, no other business activity.
An SPV gives the tax clarity of a corporate structure without the complications of an existing business. Lenders are comfortable with it, the benefit-in-kind analysis is cleaner, and the VAT position can be structured effectively. Using an existing trading company to own a yacht creates all the complications with none of the structural benefits of an SPV.
For the detailed comparison of personal ownership against an SPV specifically, see personal vs SPV yacht ownership.
The instinct to route a private yacht through a company for tax efficiency is understandable. The reality, once the benefit-in-kind numbers are modelled, is that it usually costs more than personal ownership — not less.