Marine Mortgages - Yacht Registration

One of the questions I am often asked as a marine finance broker is -" how do I register my new boat, and which type of registration is acceptable for marine mortgages ?" ( well two questions really!) For new boat owners this can be a confusing area, particularly as one type of registration is considerably cheaper than the other. So what's the difference? In simple terms there are two types of yacht registration, namely full registration, and the small ships registration or SSR.

Only full registration will be accepted for marine mortgages, as this gives you absolute title of ownership, and therefore allows marine mortgage providers to register an interest in the yacht or boat. In the worst case this then allows the marine mortgage lender to reclaim the vessel in the event of a default. All UK registrations are completed by the Maritime and Coastguard Agency UK Ship Register, based in Cardiff.  So what are the principle differences between the two? - let's take a look at each.

Marine Mortgages - Small Ships Register ( SSR Part III)

The small ships register ( also known as Part III ) is for boats which only want a low cost simple registration. It does not register title, so you cannot register a mortgage on the vessel, so you marine mortgage provider will not accept an SSR registration if you are applying for marine mortgages. The SSR may not be accepted in some foreign ports if you are using your vessel for commercial activities such as diving or chartering. The key points of the SSR registration are as follows :

• A small ship is one that is less than 24 metres ( 79 feet )
• Company owned boats, and those over 24 metres cannot be registered
• Available to UK, and EU citizens, ordinarily resident in the UK
• SSR registration lasts 5 years - date of expiry is shown on the ship's certificate. Registration can be renewed 3 months before expiry
• Ships names will not be registered if considered undesirable. All ships must have a name before being registered.
• Ships can only be registered on the Part I or Part III - not both

Marine Mortgages - Full Registration (Part I)

If you are applying for marine mortgages, then your marine finance company will require that you register your boat or yacht using full registration ( Part I). You can register in many countries, but we always recommend the British flag as it is the most widely recognised and will cause fewer problems when entering foreign ports. When registering, please note that the name of your yacht can only be reserved once the application with full payment has been processed by the Registrar. Up until last year, names could not be pre-checked, but were stated in order of preference, the first available being allocated to your yacht. It is only recently that checking of names has been allowed which can cause problems, particularly if the name is similar in pronunciation to one already registered. We would urge you to have two or three names in reserve should your first choice not be available.

As part of the registration process you will need to provide a Tonnage Measurement Survey carried out by a member of a recognised classification society - check with your surveyor when drawing up your survey specification. Finally, in order to prove title or ownership of the vessel you will need a Builders Certificate in the case of a new yacht, or a notarised Bill of Sale in the case of a pre-owned yacht

Marine Mortgages - Temporary Registration

There is an alternative to full registration, which may be appropriate in certain circumstances where speed is required in order to get the yacht on the water. In these cases, where time is of the essence, a temporary registration my be appropriate. This is valid for three months, but cannot be renewed thereafter, and full registration will need to be applied for as above. This will allow you to use the yacht legally whilst full registration is applied for in the interim. Please be aware however, that this does not protect the name of the vessel, which may be issued to another vessel in the meantime. I do know of one occasion where this has happened, much to the annoyance of the owner, so you have been warned! If you have a name that is personal to you which you must have at all costs, then go straight to full registration and don't take the risk.

Now, what else do we need to worry about when buying our boat - how about VAT? - no-one likes to pay it, and it can be very confusing, but you do need to check as your marine mortgage provider will want to see evidence of the yacht's VAT status, and so should you - ( there are ways to reduce the VAT payable legally, using boat leasing finance, rather than the more straightforward marine mortgages) - so let's look at VAT and the issues when buying a new or second-hand boat in the EU.

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Marinablu International Ltd is an Introducer Appointed Representative of DeNovo Underwriting Agencies Ltd. DeNovo Underwriting Agencies Ltd is Authorised and Regulated by the Financial Services Authority (FSA)