Are you interested in cruising on your own catamaran but don’t yet have the time to make this your full-time lifestyle?
Charter Yacht Investment is a great way to get your foot in the door, allowing you to earn money when you aren’t aboard and yet giving you the opportunity of regular sailing holidays on your own luxury yacht.
As a result of the Covid-19 impact on businesses across Australia the Government has announced a range of incentives to stimulate business activity. A recently announced accelerated depreciation measure has the potential to have a much-needed positive effect on the yacht charter industry.
Yacht buyers considering purchasing a yacht to place into a charter operation may be able to access this incentive. Buyers who meet certain criteria can take advantage of this opportunity to make a timely entry into owning a yacht in a charter operation.
An important aspect of the incentive is that the NEW yacht must be on the water and ready for operation before June 30, 2021. Multihull Solutions has access to a limited selection of NEW Fountaine Pajot Sailing Catamarans, NEEL Trimarans and Fountaine Pajot Motor Yachts that can be delivered into Australia within this time frame.
Generally, there are three categories of ownership operating profiles associated with charter yacht ownership:
- Applicants with individual personal incomes in excess of $250,000 p/a who own a charter boat: Are viewed by the ATO as operating a hobby-based business. Under a “hobby-based business”, charter boat owners are permitted to claim deductions through depreciation and interest expenses (if applicable) up to the level of the boat’s net income.
- Applicants with individual personal incomes less than $250,000 p/a who engage in a charter boat business that gives indication of a prospect of profit and significant commercial purpose: Set up and operated correctly, this model potentially allows full negative gearing (FNG) in a similar manner to an investment property where surplus losses from one business may be offset against other assessable income.
- Applicants who have an existing business with operating assets who choose to expand their business into charter boat ownership:
Set up and operated correctly, this model potentially allows full negative gearing (FNG) in a similar manner to other assets operated by the applicant in their existing business operation.
The recently announced accelerated depreciation incentive is accessible to charter boat owners who fit within categories 2 and 3.
Applicants can either choose to:
- Invest in a charter yacht for operation within an existing charter operation in Australia
- Develop their own business plan to establish a new charter boat business in Australia.
In both instances, if the buyer is seeking to obtain Full Negative Gearing it is highly recommended that they seek a Private Ruling from the ATO to ensure their business model is compliant with current tax law.
Contact Multihull Solutions on the form below to:
- Discuss the details of specific yachts available
- Obtain details of recommended professionals who can assist with preparing business plans and obtaining an ATO ruling
- Find out more about Charter Yacht Investment
The above information is provided as an indication of what we see as being potentially available to charter boat owners, however we cannot provide formal taxation advice and would urge any potential buyers to seek their own independent tax advice.
