Case Study: Structuring Aircraft Ownership using Temporary Admission

Client Requirements

A prospective owner is looking to buy an aircraft. The individual is a UK national who lives in Central London, and they are looking to purchase an aircraft primarily for business use, with occasional private use for themselves and their family, which would include visits to parts of Europe for up to 4 weeks in a year.

The prospective owner has business interests in New York and, therefore, wants to purchase an aircraft with a transatlantic range. After much deliberation, the individual opts to purchase a pre-owned Gulfstream G650 aircraft from a US owner. Given their residence in Central London, London Biggin Hill Airport was chosen as the best airport at which to base the aircraft.

The prospective owner is seeking assistance in establishing an efficient structure to own and operate the aircraft in order to fulfil their business and personal travel requirements.

Solution

As with any luxury asset ownership structuring, the first step in this case is to obtain professional tax and VAT advice in order to ensure any structure is as efficient as possible whilst also ensuring no unnecessary tax liabilities will be triggered.

Following this advice, and after choosing the Isle of Man as the ownership jurisdiction for the aircraft, an Isle of Man 1931 Act private limited company is formed to own the aircraft and is registered for VAT and tax in the Isle of Man.

Following the purchase of the aircraft, the aircraft is registered with the Isle of Man Aircraft Registry. Following de-registration from the FAA Civil Aviation Registry, the aircraft is accepted onto the Isle of Man (‘M-‘ prefix) register for private operations.

Using the appropriate team of tax/VAT advisors and service providers, completion of the EU’s Temporary Admission regime procedure will allow the aircraft to visit the EU on private trips, as and when required. The aircraft is eligible for Temporary Admission as it meets the criteria below:

– The aircraft is solely for private use (for corporate and personal use), and is not flying commercially internally within the EU.
– The aircraft is owned by a company and ultimate beneficial owner that are established outside the Customs territory of the EU.
– The aircraft is registered on a civil register that is established outside the Customs territory of the EU.
– It is not planned for the aircraft to be physically located in the Customs territory of the EU for a continuous period of more than six months.

A suitable operator for the aircraft was subsequently sourced, with the decision made to place the operations with a large UK-based operator with aircraft already based in the London area. They, in turn, assisted with the securing of hangarage at London Biggin Hill Airport.

How can we help?

At Sentient International, we understand that owning an aircraft or helicopter is a significant investment that requires careful consideration and planning. Our aim is to help you navigate the complex landscape of aircraft ownership by providing tailored solutions that align with your unique requirements and goals. With our expertise and guidance, you can maximise the benefits of aircraft ownership while minimising the administrative burdens and financial implications.

We provide bespoke corporate structures for the effective ownership and operation of a range of aircraft, including business jets and helicopters. Working with you and your chosen advisors, we ensure that your structure protects your asset effectively and is compliant with regulatory requirements whilst receiving the necessary administrative and operational support.

Aircraft registration is a crucial step in the life cycle of an aircraft. We can handle everything from initial registration to ongoing compliance and renewals, so that you can focus on your aviation operations with peace of mind.

Discover the possibilities that come with well-structured aircraft ownership. Let us handle the complexities while you enjoy the freedom and advantages of aircraft ownership to the fullest extent.

Please note that this case study is for guidance purposes and does not constitute, nor should it be construed as, tax, VAT or legal advice. We strongly recommend that the appropriate professional advice always be sought before entering into transactions of this nature.