Importing your RV into the UK (or EC Countries) - Tax Free ?

[UK-RV]

For anyone looking to import their RV into the UK.........

Correct as at April 2005

The link is here:

Section 5.1 Quotes :-

Can I get relief from duty and tax on transfer of residence?

Yes. You can bring in your belongings or vehicle free of duty and tax so long as you:

• are moving your normal home to the EC;
  
  have had your normal home outside the EC for a continuous period of at least 12 months;
  
  have possessed and used them for at least 6 months outside the EC before they are imported;
  
  did not get them under a duty/tax free scheme (but see paragraph 5.2);
  
  declare them to us as explained in paragraph 3.2;
  
  will keep them for your personal use; and
  
  do not sell, lend, hire out or otherwise dispose of them in the EC within 12 months of importation, unless you notify us first and pay duty and VAT on disposal. Our National Advice Service can tell you how to do this.

Belongings include clothing, furniture, portable tools of trade, pets and other household and personal effects, but not alcoholic drinks or tobacco products: you will not get relief on those unless they travel in with you and qualify for the duty-free allowances - see paragraph 2.1.

We will normally waive the second and third conditions if you could not meet them due to circumstances beyond your control. Explain the position to our officer when you declare your belongings or vehicle.

Generally speaking, "possession" means "to have" rather than "to own", but there are particular restrictions in relation to company vehicles imported by travelling sales representatives. Our National Advice Service can give you full details.

See paragraph 5.5 if any of your belongings or vehicle were previously taken out of the EC.

Other goods and vehicles imported for commercial purposes will not qualify for this particular relief. However, if you are also transferring your business to the UK, you may be able to claim the alternative relief on imported capital goods. See our Notice 343 Importing capital goods free of duty and VAT.


I hope it helps - after all, who wants to pay nearly 30% in taxes to import their RV ?

Regards

Paul

 

[Carl L]

Go info for our visitors.  Thanks for posting it.

 

[UK-RV]

I should point out a slight problem (isnt there always one).

The term "normal home" is open to debate.

At present, "normal home" means a place where you are working and have personal ties OR if you are not working, then it is a place where your "personal ties" are.

What, you may ask, are "personal ties" ?

Well - we're still working on that one !!

Paul

 

[UK-RV]

GREAT NEWS !!!

After a few conversations and emails with Her Majestys Customs & Excise (HMCE) in the UK, they have finally been shown the error of their ways ( ;D) and now agree with me that I shouldn't have to pay any Import Duty and Stamp Duty when importing our RV into the UK. (unless the law changes before I import it !!).

Below, I will copy the various emails sent back and forth to HMCE, and will explain anything that is specific to my circumstances - anyone else planning to import a vehicle will have to look at their own personal issues.

1st Email - sent to HMCE

Dear Sirs,

I hope you are able to assist with (what appears to be) a difficult set of circumstances:-

My wife and I are about to let our UK house.

In January 2006, we are planning to go to the USA and Canada (and perhaps Mexico) for at least 12 months (maybe 2 years) of holiday touring - we will effectively be living (or residing) in these Countries.

We will be purchasing a 7.5+ tonne RV (motorhome) to live and travel in, worth around ?75,000. This will obviously be for private use only.

After a minimum 12 months away, we wish to return to the UK and import the RV (which we will have owned for at least 6 months) to the UK also.

Do we have to pay VAT and/or Import Duty when we import the RV ?

I believe we will not have to pay these, but I am getting conflicting advice.

Perhaps you would be kind enough to answer for me - obviously your answer will be based on existing legislation and you cannot predict what will happen in 2007/8.

Many Thanks
Paul Chatwin

Reply from HMCE

Dear Mr Chatwin

I have now received a reply from our Motor Unit of Expertise.

Unfortunately it isn't good news.? If you are taking an extended holiday outside the EU, you are not considered to be transferring your residence as you are not deemed to be residing in any of the countries you are visiting. As you will be letting your home in the UK and you haven't got any firm timescales, they considered that from our perspective you would be considered to be resident in the UK and your motorhome would be subject to import duty and VAT when you return to the European Union.

The rate of import duty is 10% and the VAT is 17.5%.? The charges would be based on the wholesale value of the motorhome at the point it is brought into the EU/UK.

I hope that this has answered your enquiry satisfactorily, even though it was not the reply you would have liked.? Please contact me if you have any further enquiries.

Yours sincerely

[name removed]

Officer

Reply sent to HMCE


Hello [name removed]

Thanks for your reply.

A few queries for you though :-

Your reply stated :? If you are taking an extended holiday outside the EU, you are not considered to be transferring your residence as you are not deemed to be residing in any of the countries you are visiting.

Could I ask that you direct the officer who provided the answers, to consider the following items found on the Customs website (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000282&propertyType=document#P161_19633)

5.1 Can I get relief from duty and tax on transfer of residence?

Yes. You can bring in your belongings or vehicle free of duty and tax so long as you:

a. are moving your normal home to the EC;
b. have had your normal home outside the EC for a continuous period of at least 12 months;
c. have possessed and used them for at least 6 months outside the EC before they are imported;
d. did not get them under a duty/tax free scheme (but see paragraph 5.2);
e. declare them to us as explained in paragraph 3.2;
f. will keep them for your personal use; and
g. do not sell, lend, hire out or otherwise dispose of them in the EC within 12 months of importation, unless you notify us first and pay duty and VAT on disposal. Our National Advice Service can tell you how to do this.

You will notice the reference is to normal home and NOT Residence :

HM Customs Definition of Normal Home :

Where you usually live. For customs purposes, that is where you spend at least 185 days in a period of 12 months, because of your work and personal connections.

But if:

you have no work connections;
or
your work and personal connections are in different countries,

then your normal home is where your personal connections are.

The term Personal Connections is not defined within the website pages for HM Customs - can the Officer direct me to a website, webpage or legal definition (leaflet, factsheet, court ruling, etc) of Personal Connections please ?

Assuming this does in fact refer to the UK house (which we cannot find any HM Customs reference that it does) - how is this interpreted ?

The house is in my name but the RV purchase will most likely be in my wifes name - surely this would mean my wife satisfies all of the requirements outlined in section 5.1 ?

What if we were to sell the house - wouldn't we both then satisfy the requirements ?

Sorry to bother you with all of this - our budget for the purchase of the US Motorhome is near ?80,000 - which, if your reply is correct, would saddle us with a UK tax/duty bill of ?24,000+ on our UK return.

I await your reply with increased optimism.

Regards

Paul Chatwin

Followed with another email, five minutes later


Hello (again) [name removed]

I have found some further information to support my case concerning the treatment of VAT and Import Duty on the RV we plan to bring back to the UK.

The definition of "personal connections" doesn't seem to have a definition anywhere, although I have found references to "personal ties".

However, one piece of legislation being used by HMCE follows :-

(the website reference is http://www.opsi.gov.uk/si/si1992/Uksi_19923193_en_1.htm)

The legislation is The Customs and Excise Duties (Personal Reliefs for Goods Permanently Imported) Order 1992.

The key part states :

Rules for determining where a person is normally resident
? ? 3.?(1)? This article shall apply for the purpose of determining, in relation to this Order, where a person is normally resident.

? ? (2)? A person shall be treated as being normally resident in the country where he usually lives?
(a) for a period of, or periods together amounting to, at least 185 days in a period of twelve months;
(b) because of his occupational ties; and
(c) because of his personal ties.

? ? (3)? In the case of a person with no occupational ties, paragraph (2) above shall apply with the omission of sub-paragraph (b), provided his personal ties show close links with that country.


Personal Ties are defined as :

"personal ties" shall mean family or social ties to which a person devotes most of his time not devoted to occupational ties;

I would appreciate that you copy the above to the Officer concerned and ask that he/she reconsiders their view - or provides substantial fact to support their opinion.

Once again, Many Thanks

Paul Chatwin

And their reply

Dear Paul

Further to your E Mails of 27 June 2005, I have received a reply from my colleague who had to refer to our Headquarters for guidance.

The only definition of 'personal ties' is that in Article 2 of the Personal Reliefs Order from which you quoted. It means family or social ties to which a person devotes most of his or her time not devoted to occupational ties.

And Article 3 goes on to define normal residence as being where a person spends at least 185 days in a period of 12 months because of his or her personal ties.? We are assuming that you and your wife will not be working whilst you are touring the US and Canada.

Unless you and your wife will be regularly returning to the European Community to visit family whilst you are based in the US/Canada, then you and your wife would be each other's personal ties. You would be devoting most of your time to each other whilst on tour.? If, as intended, you are outside the EC for 12 months or more and you would have owned the motor home for more than 6 months, then we would entertain a 'Transfer of Residence' claim on it when you return to the UK, so you would not be paying import duty and VAT on it.? You would need to keep it for at least one year when you return to the UK.? These rules would also apply to other items you
purchase in the US/Canada, except for alcoholic or tobacco items which are subject to import charges irrespective of the time they have been owned outside the EC.

We do not normally consider persons going on an extended holiday as transferring their residence as a matter of course - each case is taken on its merits.

I hope that you and your wife have an enjoyable time. Please contact me if you have any further enquiries.

Yours sincerely

[name removed]

I am now in the process of writing my request in black and white and sending it to them by recorded delivery mail. Once I get their reply in print, I will be more than happy.

It just goes to show that you shouldn't believe everything you are told on face value - hopefully, Ive now saved ?24,000 when I import the RV into the UK (they'll probably go and change the law now? ).

Now - just to clarify those few issues mentioned above :-

1st - you must stay out of the EC for a minimum 12 months (although there is a reference to just 185 days in 12 months too).
2nd - you must own the RV (or other item) for a minimum 6 months (this is where there may be a problem with LLCs as the company owns the RV ?)
3rd - you cannot sell the RV for 12 months on your return to the UK (unless you pay the VAT and Duty) - we're going to live in ours for the year.
4th - your "personal ties" must be with you - I'm guessing that means you may have a problem if your kids are still in the UK (but its worth a question to HMCE - you could always dissown them !!).

I hope the above helps a few of you.

Make sure you still do the various checks yourself - and don't be fobbed off first time around.

Paul

 

[Ian H]

Good luck to you Paul
i hope all goes well with your trip and importing tax free
I will stick to my original plan because i want to sell asap in the UK
and get my return trip sorted for January 2006 ,6 months holiday is enough for me
i still got the desire to return and start earning spending money for next year

 

[Tom]

Paul

24,000 quid is a big chunk of change to save! Please let us know if/when you get this confirmed in writing. This could be very useful information for others who follow in your footsteps.

 

[UK-RV]

;D The letter arrived today.

He's a word for word copy of the letter (I wish I had a scanner).........

HM Revenue & Customs
South East England International Trade Team
Warwick House
67 Station Road
Redhill Surrey
RH1 1QU

www.hmrc.gov.uk


Import of Motor Home under Transfer of Residence Relief

I am writing in reply to your emails.

Subject to any subsequent changes in the law, you will not have to pay import duty and VAT when you import your RV motorhome (and any other belongings acquired during your trip) into the UK as long as you:

• are moving or returning to the EC
• have lived for a continuous period of at least 12 months outside the EC
• have possessed and used the items for at least 6 months outside the EC before they are imported
• did not get them under a duty/tax free scheme
• declare the items as required
• will keep them for your personal use
• do not sell, lend, hire out or otherwise dispose of them in the EC within 12 months of importation, unless you notify us and pay import duty and VAT on disposal.

Regarding the second condition above, under your circumstances, your normal home would be the place where your personal ties are. As you have no children, your 'personal ties' would be each other. Under Article 2 of the Personal Reliefs Order, the definition of personal ties are family or social ties to which a person devotes most of his or her time not devoted to occupational ties. Therefore your personal ties will be located outside the EC for a minimum period of 12 months before you import the motorhome. Article 3 of the Order defines 'normal home' as the place where a person spends at least 185 days in a period of 12 months.

You wouldn't qualify for the relief if you were returning to the EC regularly to visit family and friends during the time you are away. However, a 'one-off emergency visit' to the EC would not jeopardise your claim for transfer of residence relief.

If your UK home is in joint names and you were still to own it for the period you are away, this would not affect the situation.

It is our opinion that you would be granted 'Transfer of Residence' relief on the importation of your motor-home based on the facts that have been presented at this stage. The final decision on entitlement to TOR will rest with the officer dealing with your claim at the time of import. I advise that you retain this letter for production to our officer at the time of import of the vehicle.

Yours sincerely,
[name removed]

 

[Tom]

Thanks for the follow-up Paul. This could be of help to others who plan/hope to do the same thing.

Please keep us abreast of your plans and do try to hook up with folks here when you arrive, either at a formal rally or one of many impromptu get-togethers.

 

[terry nathan]

Hi Paul

Congratulations - you've done a lot of leg work, with a successful outcome.    You might consider sending it off to one of the UK motorhome magazines - Motorhome Monthly tends to discuss American RVs very often.  A lot of people would be interested.

Terry (back home in La Manga, Spain)

 

[Tom]

Paul & others,

I've split off the messages discussing the registration issues to a new discussion here.

 

[UK-RV]

Hi Guys

Thought I would provide an update :-

Following our 15 month USA/Canada tour and subsequent return home, I can confirm HMRC have accepted our Transfer of Residence claim and have issued the VAT / Import Duty "customs relief" certificate.

This means we have in fact saved ?23,000 ($46,000) - which went some way to paying for our vacation !!

There is a stipulation that we cannot sell the RV for 12 months - if we do, we have to pay the Taxes.

However, even here there is some room for manoeuvre as HMRC now calculate the taxes based on the UK wholesale value of the RV.

We can get quotes from UK dealers to buy the vehicle (which will obviously be low) and then they make an allowance for the vehicle being left-hand drive and lower the value even further.

Hopefully, if we sell this year, we can get the tax bill down to nearer ?10,000 ($20,000), which would be reflected in the selling price.

Regards
Paul

 

[Tom]

Congratulations Paul and thanks for the follow up.

 

[ArdraF]

Wow!  That's quite a savings, Paul.  Hopefully it made up for some of the other hassles you experienced. 

ArdraF

 

[Shayne]

Just think Tom  just as soon as Paul sends you that 10% of his savings, he won't have to go to the Doctor about his back from carring all that money around.   Paul  don't you think Tom Deserves that for keeping you on the straight and narrow the past year..LOL

 

[BernieD]

Hopefully, if we sell this year, we can get the tax bill down to nearer ?10,000 ($20,000), which would be reflected in the selling price.

Gee, and some people complain about using a Montana LLC ;D ;D ;D

 

[AJHales]

What is Montana LLC? I've seen this mentioned in several postings but I am unclear what it is. Also I love the idea of buying an RV and touring the states for 12 months before importing it to the UK duty free. Would I need to apply for a visa to stay in the states for 12 months, if so which one & how easy is it to get?
Andy

 

[Tom]

Andy,

A Montana LLC is a limited liability company which is set up through a lawyer in the state of Montana. The LLC "owns" the RV, allowing  it (the RV) to be registered in that state, avoiding the higher registration fees and taxes in other states. In addition to an initial fee, you pay a low annual fee to the lawyer and his/her office takes care of all the paperwork and payments.

 

[Carl L]

What is Montana LLC? I've seen this mentioned in several postings but I am unclear what it is. Also I love the idea of buying an RV and touring the states for 12 months before importing it to the UK duty free. Would I need to apply for a visa to stay in the states for 12 months, if so which one & how easy is it to get?
Andy

I suspect you will require a visa for a one year stay, the visa waiver program only covers 90 day stays.    In any case the US Embassy is the place to go.  See their website at http://london.usembassy.gov/rctour.html, and follow the various links.   

 

[UK-RV]

Hi Andy

You need to apply for a B2 Visitor Visa from the nearest US Embassy - and if you can cope with the hassle of getting that, anything you encounter on your travels will be easy in comparison (did I really just say that?  ).

The B2 will allow you to REQUEST a stay of upto 6 months on arrival in the US.

So, for a stay of 12+ months, you will go into Canada (or Mexico, or even a Cruise) and REQUEST a further 6 months on your return to the US. But you will need to stay out of US for a couple of weeks or even couple of months.

Canada is chosen by many as there are no restrictions on Brits travelling into Canada (be sure to get a free Canada card from your US motor insurance company).

The US are clamping down now on how many times you can REQUEST a B2 stamp - I've heard of Brits touring for 5 or 6 YEARS who have now been told to leave. (a bit annoying if you have the funds to support yourself).

If you find you aren't able to leave the US for a period of time before returning and REQUESTING another B2 stamp, you can send off an Extension Application (current cost $200 per family) and REQUEST an extension of upto 6 months.

If you do this, they will require lots of proof that you intend to leave (booked airfare ticket etc) and that you have funds to support yourself whilst in US. You submit the forms as late as the day before your B2 expires and they are "likely" to take a few months to process your application (that was our experience).

Hope it helps

Paul

NB You will notice I highlight the word REQUEST. This is because even after getting a B2 Visa, you have no automatic right to enter for the 6 months - you have to REQUEST it and they can - and have been know to - deny that REQUEST.

 

[brenda]

Hi guys

Does this mean that if I go myself to buy an RV, I will have to pay the tax after 1 year return? I will have given up my home in the UK and planned to go from Florida to Berlin. But if it better (cheaper)  I could come back via the UK.

I have no family that i see regularly in the UK now.