Amadea owner sued for millions
An Isle of Man court has ruled that the owner of the famous superyacht owes £36.8m in tax…
Owners of the 106m Amadea will have to pay £36.8m in tax following its deregistration for VAT in the Isle of Man, a tribunal has ruled. The yacht currently sits in San Diego, flying the US flag after its seizure by US authorities last year due to alleged links with sanctioned Russian oligarchs.
According to court documents, the superyacht is owned by Nereo Management Limited. The company was registered in the Cayman Islands with the sole purpose of purchasing the yacht for €217m (£184m) from Lürssen in March 2017. It then registered to the Isle of Man for VAT on the 17th, describing itself as a ‘worldwide charter business’.
A week later, Amadea was imported into the Isle of Man and Nereo accounted for import VAT of some £36.8m, which it reclaimed its first VAT return. Then in December of that year, while the yacht was outside the EU in Montenegro, Nereo stopped trading as a charter operator (making it untaxable) and applied to deregister for VAT in the Isle of Man.
Isle of Man Customs and Excise subsequently raised an assessment in May 2021, seeking payment of VAT of £50.6m and a penalty of £7.6m. Then in May 2021, Isle of Man Customs and Excise issued an assessment for the larger sum of £50m plus interest and penalties. This was based on the price of €290m at which Amadea had been advertised for sale at the Monaco Yacht Show in 2019.
The penalty was imposed on the basis of the alleged ‘careless inaccuracy’ in Nereo’s final VAT return, which did not account for output tax on the purchase of the yacht. Nereo also argued no VAT was owed as the yacht had been outside the Isle of Man at the time of deregistration.
The judge, Jonathan Cannan, ruled that the yacht was in fact taxable. Whilst did not consider it unreasonable for the authorities to use the asking price at MYS as evidence of the yacht’s value in November 2017, he added the best evidence available was the €217m purchase price in March 2017m and ruled that the assessment should be reduced accordingly. This resulted in Amadea’s owners owed tax amounted to £36.8m, rather than £50m.
Amadea was seized by OFAC in 2022 when US law enforcement claimed that the vessel was owned by auctioned Russian Senator, Suleiman Kerimov. However, Nereo Management Limited is reportedly owned by an unsanctioned Russian oligarch, Eduard Khudainatov, the ex-CEO of state-owned oil giant Rosneft.
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