How to avoid the trust fees for N-reg ownership

[drauk]

I've come up with the following plan in order to avoid the £500 one has to pay for a UK-based trust to allow ownership of an N-reg aircraft.

1) Buy an N-reg plane.
2) Get a trust. It is about £500 but you'll only have to do it for the first year.
3) Get your wife or girlfriend pregnant.
4) When waters break, load her up in the back of your bird. You'll probably want a mid-wife, or at least a buddy, unless you've got a good autopilot. Because of the weight issues you probably shouldn't use a C152 for this.
5) The UN considers a child born in-flight to have been born in the airplane's registered country. (Reference (http://people.howstuffworks.com/ref/air-birth.htm?cid=rss1))
6) Your child is now a US citizen.
7) Put the plane in their name.

Job done.

[slim_slag]

lol

You realise you have turned your first born over to a life of persecution from teh irs :)

[Final 3 Greens]

Drauk

That's a cunning stunt...

Now remind me of the difference between a magician's trick and a policeman's truncheon....

The cost of raising a child in the UK is only abot £50k, so, allowing for exchange rates, you will end up making a loss of approx. £49,700.

Imaginative plan though.

[IO540]

That's brilliant, drauk, and you are probably correct. In fact I have met a number of people who had a family member (not sure why a family member should be particularly trusted) who was a US citizen and put the plane in their name. Done.

But the cost of raising a child is way more than £50k - unless you feed it crisps and dump it on the DSS.

[IO540]

The owner is normally a US citizen, and yes he will be liable for US taxes. But he will know that - that comes with being a US citizen and the means of earning the money is nothing to do with that. There is a UK-US tax treaty to offset the two tax rates.

[Fuji Abound]

On the same web site it seemed an odd two links to combine one below the other :)

How Airplanes Work
How Pregnancy Works

Must look them both up :) :)

[IO540]

I think that getting somebody (a woman, presumably) pregnant is most unlikely if one is messing about with aeroplanes. There are hardly any about in this game.

[flyingfemme]

The owner is normally a US citizen, and yes he will be liable for US taxes.

Ownership is not taxable in itself.......residence in certain US states may give rise to a local tax liability but that's not a problem for owners of N reg over here. A trust corporation (properly set up) will file a nil-tax return every year; that's one of the things you pay your trustee for.

[Andy_RR]

Uniquely, US citizens are liable to tax on their world-wide income even if they are non-resident, I believe. This is mitigated by double taxation treaties, but that and Islamic Fundamentalism are two good reasons to avoid being a US citizen. George Bush might be a third! :}

[englishal]

Uniquely, US citizens are liable to tax on their world-wide income even if they are non-resident, I believe
Only if their income outside the USA is above a certain threshold (about $80,000 or so) - OR if they have been naughty enough to visit Cuba or certain other places America hates. Then they become liable for income tax on all their earnings.

[mm_flynn]

Only if their income outside the USA is above a certain threshold (about $80,000 or so) -

More correctly US citizens are liable for tax on global income but overseas earned income has an allowable $84,000 deduction. And no there is no tax liability associated with just operating an N Reg aircraft (as composed to renting it out as a business).

[david viewing]

Using a light aircraft for this purpose seems to me slightly dubious, definitely dangerous and very unlikely. But what about a maternity version of the 'vomit comet'?
I'm not sure that the extreme weightless maneovres (of the aircraft) would be needed, but a full medical team and equipment could certainly be on board. And all the irritating paperwork could be handled by experts as part of the package.
I don't think anyone should underestimate the advantages of having a retirement prospect in the US courtesy of one's offspring. No more Tony Blair, awful weather, etc. etc. .
Strangely my wife was a bit negative about this whole idea when I suggested it just before the arrival of our daughter (they tend to be slightly irrational at these moments). Said daughter, now grown up, would certainly make use of a US passport if she had one and I'd be spongeing off of her instead of having to put up with Blair's Britain.

[slim_slag]

More correctly US citizens are liable for tax on global income but overseas earned income has an allowable $84,000 deduction.And even more correctly :) only if you are out of the US for more than 330 days in 12 rolling calendar months.

The deal on places like Cuba is that if you spend time there during the 12 calendar months you have to count those days as being in the US.

Anyway - in no way, shape or form would I inflict US citizenship with it's associated tax liabilities and enforcement policies on my kith or kin just to save £500 a year. Also, taking US citizenship doesn't automatically cause you to lose British citizenship and you can still go through the european line at Heathrow (as long as you use your UK passport)

[slim_slag]

Sorry, not true.

[mm_flynn]

Dual nationals UK/US need to enter the US on their US passport (That is a US rule for US dual nationals) and enter the UK on their UK passport if a resident (otherwise how do they know your status). You do need both passports at check in so that the airlines can get the right data to the right people.