Quick note on taxes in Canada, there are two types on vehicles, federal GST (6%) and provincial sales tax PST (7%) here in B.C., which varies from province to province.

If a vehicle is bought for export, then you can avoid the GST. Too late in this case as already paid by the original purchaser. This is applicable on new vehicle sales and sales through an auto dealer. He will not have to pay GST again when he buys it off his friend.

He will have to pay PST again on the private purchase on the declared value. Here in BC it is self declared but if it is too out of line you have to sign a form stating why it is less, usual reasons are rebuild, accident, etc.

Probably too much of a hassle but if he were really keen on avoiding the PST, there is none in Alberta. So for next time, consider buying the bike there, and avoid paying the GST by exporting and avoid the PST as there is none.

You do have the advantage of potentially setting the value for eventual import into the UK as it is a second hand vehicle transaction, so a bit of prospective planning could set the value at what it will be worth when it has 30K on it, and you'll have paper work to match. What I don't know is whether the UK will use that as a valid value for importation. Certain countries don't really care what you paid, they will just use a blue book value.

Many thanks for your friendly responses – much appreciated.

Just to give you a bit of background – I am a Brit (and a fairly young one at that, 23), currently living in London but planning several adventures in the not to distant future (top of the list at the moment is a trans-Africa trip in 2008).

The reason I've bought a KLR in Canada is because my friend (who is Canadian) and I, wanted to have the same bike for our trip. The KLR was the obvious choice in terms of budget and simplicity, but since it isn't available in the UK I thought the simplest option would be for my friend to buy the bike and I'd just buy it off him [so much for that theory].

I don't want to just ship the bike back to the UK directly from Canada [even though it would be infinitely simpler] because I want to make the most of having a bike on a different continent. I'm sure you'll all agree it's fairly hard to resist a quick jaunt through Monument valley and Baha.

In terms of the tax, it seems that the GST and PST already paid on the bike are dead and buried. Fair enough - that's a price I'm willing to pay to be able to use the bike in North America. But this additional re-sales tax (the PST) seems like a blatant tax grab to me and one that could potentially be avoided. I've heard some rumours that the PST is refundable if the bike is exported within 30 days of purchase - does anyone know if that's true or simply wishful murmours?

The other option is to re-register the bike in Alberta (where my friend actually comes from) and avoid the extra PST by doing the sale there. I suppose it all depends on the cost and hassle of re-registering and also whether Revenue Canada are wise to such behaviour [no doubt they are].

More than likely I'll end up just having to bite the bullet and pay the extra 8% in PST again. But on the bright side, I've still got myself a new bike and it was still quite cheap. And as we all know 8% of quite cheap is not much at all...

Thanks again.

Interesting plans:

I see several problems here, or things you should investigate before taking your trip. I think the 8% tax is the least of your worries.

I think the solution is pretty obvious. Since your friend is from Alberta, it's almost a no-brainer to register the bike in your name so that you'll be hit with less tax. Just make sure you can use a proper c/o address (for example your friend has relatives in Alberta).

Non-residents can claim GST but not PST on items bought for export from Canada.

Right now, the bike is in your friend's name, so you're likely an additional rider on his insurance policy. Which is likely fine (but it's a good idea to confirm this with the insurance co). For example I contacted my insurance co (State Farm) and they would have no problem having licensed riders outside North America use my bikes. Of course the insurance is only valid in the US and Canada.

Now, when you get to Mexico, be sure you have a notarized letter of approval from your friend stating that he is the owner of your bike and permitting you to use it. I think this is pretty easy, and can even be done in Arizona. But I'd do it in Canada to be safe, before you leave, because it's a lot easier to get a notarized letter in Arizona near the border than it is to have to go back to Canada.

Now, if you buy the bike from your friend before you start your trip, you then have the issue of finding your own insurance. I don't know if Canadian companies will insure non residents. I'm in this situation for the UK (I have a bike over there which I transferred to my name which I'd like to use when I travel to Europe maybe once or twice a year). My problem is, it's proving very difficult (and it may be impossible) to find UK insurance companies that will insure non residents. So, be sure to check this.

The advantage of having the bike in your name of course is when you cross the border at Mexico you don't need anything notarized to say you need permission to ride it since you'll have the ownership.

Once you reach Mexico, the insurance issue goes away because you have to buy separate insurance before you enter.

Depending on what you find out, you can either buy the bike from your friend at the beginning or end of your trip, assuming you make a round trip. If I had to guess, you'd be better off buying the bike off your friend at the conclusion of your trip.

Now, you have the issue of importing the bike into the UK. Can you easily import vehicles that were not originally meant for the domestic market? This is virtually impossible to do for the US. In other words, it's very hard to bring in a vehicle model that wasn't originally available in the US, unless it's more than 25 years old. The reason being, is that they get you on all kinds of things, such as high-beam aim (different if you drive on the left vs right of the road), speedometers (miles vs km) whether lights are always on, or can be turned on/off, and even colors of turn signals, emission standards, etc... The country where you are importing can make you change all these things to suit their standards before they'll let the import go thru, and that is where it can get expensive. Be sure to check this as well. I would contact a UK customs broker to see what's involved.

Sorry, I don't want to rain on your plans, but it's important to think these things through before taking the trip.

__________________
Better to be an idiot than a crook.

Just a quick note re: Tiger boy's take on the locationof the bike. I don't see anywhere that the bike is in Alberta. If that was the case the whole thing becomes somewhat easier.

There is no provincial sales tax (pst) in Alberta. As a matter of fact I think that you might want your freind to sell it to you in Alberta no matter where you are.

Insurance in Alberta is all done through private insurance companies instead of provincial bodies. These companies will sell you pretty much whatever insurance you want. The exception being insurance for Mexico. For that you will want to go through someone like Sanborn's insurance.

I don't know if this helps but that's the little that I know.

Rick