Purchasing and operating an aircraft under a company

[Dash8capt]

Hi Everyone,
A question the the aircraft owners and tax specialists out there. What are the advantages/implications and disadvantages of purchasing and operating an aircraft under a company structure.
What is able to be written off etc?
Pm me if you wish.
All help appreciated.
Kind Regards,
Dash:ok:

[Arnold E]

I think its the old story, if you want to make a small fortune out of aviation, start with a big fortune.:ok:

[Volumex]

I haven't got an answer, but I can supply an alternate question.
Has anyone purchased and operated an aeroplane under a self managed super fund?
If the aeroplane is purchased and put on-line at a flying school - is that sufficiently arms-length to keep the auditors happy? Are 100% of the costs able to be applied against the SMSF? (Assuming that the owner rents the aeroplane at full cost whenever they take it flying and on paper it can be made to be nominally profitable.)

I'm just annoyed at the finance industry gouging profits out of super whilst generating negative returns. If I am going to have money stolen from my super fund, I'd rather waste it on aviation than line the pockets of some pimple faced git with a commerce degree.

[Arnold E]

I'm just annoyed at the finance industry gouging profits out of super whilst generating negative returns. If I am going to have money stolen from my super fund, I'd rather waste it on aviation than line the pockets of some pimple faced git with a commerce degree.

Love the way you think, I reckon Iv'e been doing that all my life.:}

[Fred Gassit]

Legislation with respect to SMSFs changes almost weekly, I suspect you would be testing that legislation every step of the way.

[tail wheel]

"Write off" - You can't "write off" anything that may have tax implications.

I assume you mean offset expenses (including depreciation) against profits, if there are any? You would have the same legitimate expenses including depreciation, whether a company or an individual. I would have thought it preferable to operate as an individual, then at least you can offset the inevitable losses against your other income.

There are no tax specialists here. You should seek professional advice.

[Horatio Leafblower]

There are no tax specialists here. You should seek professional advice.

Oh come now, Tailwheel - you and I both know that pilots are financial geniuses! :D

[tail wheel]

Oh come now, Tailwheel - you and I both know that pilots are financial geniuses!

:ok: :}

How many pilots have I heard over the past fifty years tell me they want to buy an aircraft to reduce their travel costs, build hours etc. I've heard all the usual dreamer stories.

What are the advantages/implications and disadvantages of purchasing and operating an aircraft........

In fifty years I am yet to find one financial advantage of aircraft ownership, and I've owned six aircraft, five yachts and four sports cars (including my present E Type Jaguar), the rest of my money I spent foolishly!

If it flies, floats or fornicates, rent, don't buy! :ok:

Aircraft ownership is only for those who can afford the luxury.

Does any one know of any (Cessna 180) that might be sitting in the back of hangars not going any where for a while and needs some TLC?

I'm yet to find any aircraft that benefits from "TLC"! If an aircraft is "not going anywhere" the only thing that aircraft benefits from is never ending buckets of cold, hard cash! There is probably no change out of at least a hundred grand to restore a "dead" C180, C182 or C185 and timex engine and prop!

Before anyone even thinks about acquiring and operating an aircraft, ask Skywagon1915, Chimbu Chuck, FTDK, Jaba etc what are the real costs of owning, operating and properly maintaining an aircraft.

Why invest in aircraft when I have an iconic bridge for sale, with excellent Sydney Harbour views, very cheap this week! :ok:

Penniless dreamers and aircraft don't mix.

[baswell]

In fifty years I am yet to find one financial advantage of aircraft ownership
That depends on how much you fly it. The average 50 hour private pilot? No. Flying 200 hours a year? Good chance you come out ahead versus renting.

[Howard Hughes]

Penniless dreamers and aircraft don't mix.
I don't know, I'm doing quite well thank you, but then again I don't own an aircraft!;)

[Flying Binghi]

via tail wheel; ...In fifty years I am yet to find one financial advantage of aircraft ownership


:confused:

I think there would be many companys/individuals out there that would disagree.




.

[Old Akro]

Owning it in a company will have GST & FBT issues. You can choose to depreciate the aircraft - or not. If you depreciate it, then you're likely to have CGT issues on sale. The company will almost certainly run at a loss. If there is some offsetting income you can put in the company it might work to advantage. Otherwise you'll end up with a tax loss you can't use. The decision about company or not will be determined by your tax circumstances. The company (in rough terms) will be $1k to set up and $1k pa to maintain.

In my opinion if you're going to fly IFR (especially single pilot IFR) you need to either own the aircraft it or know it intimately (ie fly a mates aeroplane). Single pilot IFR trips in rented aircraft is a mugs game. More so if its travelling for business.

[UnderneathTheRadar]

Also remember that if you're going to fly the aircraft yourself privately then you either need to charge yourself a market rate (with GST) or risk being required to pay FBT as a fringe benefit to an owner.

So by the time you've paid market rate and GST then if you're only looking for a way to save tax then you're not easily going to escape from that. What you will do is limit your personal liability if someone else crashes your aircraft and wants to sue.

Alternatively, register for GST in your own name (and ABN) and operate the aircraft through that. All the losses that Akro correctly predicts can then be offset against your own tax return instead of being locked up in a company and difficult to access.

UTR

[baswell]

Alternatively, register for GST in your own name (and ABN) and operate the aircraft through that. All the losses that Akro correctly predicts can then be offset against your own tax return instead of being locked up in a company and difficult to access.
Only if your income is derived from something you have a real use for the aircraft for. You cannot have expenses in one field of work and offset against another.

In FY2011 when we were developing OzRunways and test flying it in my own aircraft; I had no income from that business, so I could not offset against income from my other business. This year I will be able to. (And of course the 2011 expenses will have accrued.)

You could put it in if you do your own taxes, but good luck if you get audited!

[Old Akro]

You couldn't find someone to invoice $10?

[Frank Arouet]

Concurring with Clinton and the disclaimers, may I suggest you investigate your self run superannuation entity, (if you can manage one in the legal sense), buying an aircraft for your business use. I know this can be done, but I'm unsure how the sums worked out. Probably poorly, but if you make a loss, it is your own superannuation loss, not the company. Fund managers do this on a daily basis and I'm yet to see one go to Accountants pergatory.

As mentioned earlier, don't contemplate anything unless you can guarantee 200/300 hours pa. or the only option is a car drive in the GAFA to do your trade.

Oh! and don't forget about # 206. There may be implications for the unwary.

[tail wheel]

Money ‘in’ exceeding money ‘out’ is a concept that is lost on some aviation participants.

Hallelujah! A pilot that knows the difference between profit and loss! :ok:

.... may I suggest you investigate your self run superannuation entity, (if you can manage one in the legal sense), buying an aircraft for your business use.

Frank, I suspect that may be fraught with danger? I'm no Super guru but I suspect that like a trust, a self managed super fund can not trade at a loss and must achieve financial surpluses (profits). The last time I looked at a self managed fund, they weren't economically viable with equity less than around $400K.

[Mach E Avelli]

Dash 8 Capt, I am no expert on tax, and based on my net worth, also pretty useless at high finance.
However, I probably qualify as an 'expert' (if there is such a thing) on the pitfalls of operating both aircraft and boats. Unless you are a Richard Branson and have figured out a way to get 2000 hours a year of revenue flying out of your airframe, there is no future in owning the thing. AND don't even think about propping up your investment by putting it on line with a flying school or charter company, because they never achieve the high utilisation that they promise (unless 'high' can be considered to be 100 hours a year).
With boats, there was a time when you could buy one and put it into charter under management of an agency, which of course took out commission, management, cleaning and maintenance fees before occasionally handing you some small change to make you feel good about your wise investment. The theory was that there would be sufficient demand that you would make a small loss but end up owning it in five years on the tax write-offs. In practice there were never enough punters, or too many competing boats, so the losses were large. The ATO got royally p!ssed off with buying boats for people, so brought in rules requiring any wannabe Aristotle Onassis to prove his shipping venture to be viable. The result was - and still is - plenty of cheap, slightly damaged, ex-charter boats on the market.
A different situation MAY apply if your company had a genuine need of air transportation and you could prove to the ATO that this could not be adequately served by airlines. e.g. carting specialised equipment to remote sites.
Tailwheel's advice re items that float, fly or fornicate is sound.

[Anthill]

Dash, the advantage to operating an aeroplane under a company structure is that it will certainly make a loss and that loss can be used to off-set gains (profits) made from other company revenue sources. You will need to decide if you want to operate the company as a business for profit or to subsidize your personal flying, should that be your intent.

The write-offs in aircraft ownership are jackdaw: depreciation, fuel, maintenance, hangar space, insurance...etc. I have never owned an aeroplane however I have been tempted and then the rational part of my brain corrected that momentary loss of sanity. Have a look at a simple costing issue in aircraft ownership: insurance. This is a fixed cost. Let's say your annual insurnce is $4,000. If you fly 1000 hrs/year, the insurance component of operation is $4/hour. If the aeroplane flies 100 hrs/year, insurance is $40/per hour. If you generate your costings assuming 500 hrs per year and then it only flies 200 hours, how screwed are your costings going to be? Now add in the considerations or hangar costs, engine overhaul (which you charge yourself for now but must pay in the future), props, tires..and then you can see why owning an aeroplane is only for the rich or a well disciplined business owner who has a market for the asset.

Regarding a SMSF, the trust cannot purchase an asset from which you, the beneficiary (or a relative), can derive enjoyment. This means that you cannot buy a house with your SMSF and then move in. It also means that if you buy an aeroplane with a SMSF you (or a relative ) can never, ever fly it.

If you derive any use of an asset purchased by a SMSF, you risk losing the taxation status of the fund and also be subject to criminal charges (fraud). My fund owns some artwork which is on loan to a gallery and also some Gold, which is in a deposit box in a bank; to have either of these assets stored in my home could be deemed by the ATO as being for my personal enjoyment.

A SMSF exists to make a profit and I cannot see how aircraft ownership through a fund can attain this objective. One way could be to purchace a collectable aircraft (Spitfire?) and then store it away, hoping that it will appreciate in value. In principle, you could do the same with any collectable (as an asset class): vintage cars, antiques, artwork(!) all would have to be considered as a higher risk investment but ok if a) you know what you're doing and b) you mitigate the risk with more stable investments.

SMSF require that profit is maximised and a totally ruthless, unemotional approach must be taken in its managment. In the current climate, anything that returns better than 6% should be considered otherwise leave it as cash. Your fund can buy and sell old wine barrels as long as you think you can make a profit! Unless you know a way to get a 6% return on an aeroplane (that you wont be allowed to fly), don't even think about it :eek:

[Anthill]

I just had a closer read of Frank Arouet's post re use of aeroplane owned by SMSF and then used for business purposes: this could be allowable. The use of a business premises owned by a SMSF can be used to conduct another business where the owner of the business is the beneficiary of the SMSF. This being the case the use of an aeroplane in a similar fashion might be ok..I'd get a ruling from the ATO first, if that were contemplated.

[baswell]

Dash, the advantage to operating an aeroplane under a company structure is that it will certainly make a loss and that loss can be used to off-set gains (profits) made from other company revenue sources.
You sure about that? See my post #14.

[Bankstown Boy]

Just to add a small point, jus' in case someone's still thinking about the SMSF option - a superfund can not operate a business.
So it can not own an aeroplane and lease it out directly, whilst doing maintenance & 'stuff'. However, like any "asset" ( I know ... I own one ... I shouldn't call it an asset - sorta/kinda implies 'appreciation' to me) it could be owned by a SMSF and then leased to an operating company. I'm tipping that the cost of that round-robin would outweigh any tax "savings".

My number 1 financial rule? I don't try to minimise tax - I look to maximise returns. I know too many people who spend $2 to 'save' $1 in tax. Just my $0.02 worth (after tax - naturally)

[bentleg]

SMSF is required to have an investment strategy which the trustees must follow and certify compliance with at EOY. IMHO you would need to have the aviation bit in that document.

In a more genral vein I dont think ownership works (over renting) unless you fly over 300 (ballpark) hours per year.

[Mach E Avelli]

Yep, 300 hours a year would be a good ballpark for owning a VH aeroplane versus hiring. I hear horror stories of $10,000 inspections, so you wouldn't want to amortise that over 100 hours. Even a fully insured recreational category aircraft needs to do 100 hours to break evens on cost of hiring and the better ones in this category now go out the door at about $150 an hour.
I beat the low hour odds by not carrying hull loss insurance (because it is ridiculously high) and figure at 100 hours a year it still costs me about 60 bucks an hour including fuel to run a little two seater that only burns 15 litres of 98 octane mogas an hour. I do all my own maintenance, for which I charge myself nothing. Maintenance time averages about two hours for every flight hour (yes, agreed - I am a bit slow on the spanners!). Hangarage is free if I don't count the cost of having bought it in the first place.
I looked at a 180 hp Mooney and figured my costs would quadruple if I did the same hours, because straight away I would be in the hands of a friendly workshop at $80 an hour for maintenance and up for certified parts as opposed to automotive stuff allowed in much of an RA machine. A Mooney is not so much faster than the bugsmasher I fly, and the miles per gallon of this most efficient GA machine are still half what I currently get, so the only gains would be some comfort and the potential to upgrade to IFR.
Whatever hours you think you will do in private operations, halve them, double your estimates for inspections, then do the sums.

[Arnold E]

a friendly workshop at $80 an hour for maintenance :eek::eek:

He really would be friendly at that price. Your friendly Ultra Tune for your car is a good deal more than that. ( approx $105-$110 an hour).

[baswell]

50 bucks an hour for the friendly local RA-Aus level 2 (and 3 and 4) at Gawler. ex-LAME (still works with other LAMEs on GA aircraft), knows his stuff. Doesn't have an expensive shop (or Class D hangar) or staff.

I was even surprised at the affordability of my latest RAD43/47 from David Foord, on his own property near Goolwa. Took one of his boys a while too to get it right (I reckon this is the last time I get this ACK re-adjusted, replacement next time) and needs expensive equipment to do it.

If you shop around and go away from major GA airport, there's good deals to be had.

[jas24zzk]

Starting to sound like many of you guys are restoring Ford Mustangs... (insert puke icon)

[Clearedtoreenter]

In a more genral vein I dont think ownership works (over renting) unless you fly over 300 (ballpark) hours per year.

Rubbish. Take a modernish $150K 172 doing 150 tach hours per year.
Insurance $4500, maintenance (presuming your LAME is not a psycho - many are:)) $4000, hangarage (presuming you are not in a Rolls Royce hangar in some posh Class D facility), $2000, engine/prop $2500, fuel $9000, capital $2000(?) (what are you getting on cash now.. and paying tax on it?) Depreciation is not much of an issue. Planes are not going up like they used to but if you buy sensibly and keep it nice, you should do OK when you come to sell. (unlike cars that lose half their value as you drive out of the showroom!)
Adding a bit for contingencies, budget say $25k per year(?) or $167 per tach hour, which would equate to maybe $150 per VDO hour in your logbook. Can you rent a nice modernish $150K 172 for that? (No, not a 35 year old 15000 hour cr@pbox!)

So you don't want to fly 150 tacho hours per year? No worries. Sell 50 hours to your mates at $180 per VDO hour and you have recovered $9000 of your annual costs and reduced your own hourly rate still further and you could still end up putting 110-120 VDO hours into your logbook. For that you get something to love and cherish,:), no one can book it before you, you can go anywhere any time you like and hopefully lots of fun (and maybe the odd nights lost sleep, but things always feel better in the morning!) Whatever you do, DON'T be tempted to put it on line... Your costs will double, your plane will be wrecked, they will let any Tom, Dick or Harry fly it (Tom and Harry might be alright but there are Dicks who don't respect anyone's property). Stay away from capital city/class D airports too - they're horrible anyway and you only end up paying Macquarie bank or someone similar through the nose.

Talk to your accountant .. If you rent some of it to others there might well be ways to reduce your costs for the faction you rent out.

There you are, a little business plan for you. What the hell - Your super is going nowhere and is just an under performing nightmare and you can't take it with you anyway. Buy a plane and put some energy and sunshine back into ths doom and gloom GA industry - and have some fun! (and maybe a poor nights sleep now and then.)

[tail wheel]

$150K Cessna 172, 150 hours per annum.

Insurance $4,500 per annum = 3% hull insurance, plus passenger liability, plus public liability. That sounds very reasonable?
Maintenance labour $4,000 = at a very reasonable $80 per man hour, max 50 man hours per 150 hours = average 33.3 man hours per 100 hours. Maybe.
Maintenance Parts - no provision?
Engine/prop $2,500 per 150 hours = $16.67 per hour, $33,333 for the full life of the engine and prop. That sounds like a "Dulux" overhaul and assumes no top overhaul, cylinder change or other repair is required during the life of the engine.

You got a cheap deal there dude! :ok:

For that you get something to love and cherish.....
I certainly loved and cherished the seven or so aircraft I've owned over the years, particularly on the day I bought them and on the day I sold them. I don't recall any great feelings of compassion in between!

[Clearedtoreenter]

Insurance: shop around Dude, you'd be surprised. Noone should be paying 3% and you don't need passenger liability cover unless in charter cat and on someones AoC and used in charter. That's a different ball game especially where maintenance costs are concerned.

Maintenance: well, true, that's where you're most vulnerable. Shall we start a 'how much do you pay for an annual on your c172? thread?' I bet you'd still get some under $2000. I'm sure you'd get some at $15,000 too. Don't forget if in private category, you don't need a 100 hourly... Just an annual. Can save even more if you like doing your own oil changes and the like. A few LAMEs will still let you 'help out' with the annual too. (as long as you can convince them your not an incompetent idiot... Not an easy task because they often think everyone else, especially the last LAME is.:-). That all important relationship with your LAME is the key to keeping maintenance costs under control. Don't imagine you can walk into any shop and get a predictable and reliable price... Your LAME needs to know your plane. (and you) Engine and prop can run 'on condition' too and many (outside of charter) go well past 12 year calendar TBO but few LAMEs seem keen to go past the 2000hr TBO, although under Eng4, in theory, they could. A lycoming IO360 in a modern 172 is just purring along and in regular private use, if treated properly, could and should go to TBO without significant unplanned maintenance.

Nah, if you can't run a private 172 for 150 hours for 25grand/year something's wrong. I hate to see all this 'don't do it' gloom and doom around. I've owned even more planes than Tailwheel btw and might even have a couple for sale right now... :-) Let's get ths industry moving.... Cus its deader than a Dodo right now. Pruners, Rush out!!! Buy a plane it just does not have to be as desperate, expensive or risky as you think and really can be cost effective for the average private pilot, you can offset cost by selling a few hours and its a lot of fun! (mostly).

[43Inches]

Cleared, 3% is a pretty standard rate for on-line aircraft, you can get cheaper for private operators. In the past anything less than 3% for on-line was fantastic until you had to claim, a bit like claiming off budget car insurers. 3% has nothing to do with liability, its a hull loss calculation based on the chance of the aircraft being damaged. Passenger liability like home liability insurance is a tiny part.

Maintenance is very variable and mostly based on the aircraft, not the maintenance provider. You may be able to save some money in the short term by stalling certain things until they break but they catch up in the long term. A good engineer can save a few dollars by good parts management and knowing exactly when things are due but its not huge compared to the overall cost of maintaining an aircraft.

Go cheap short term pay more long term, you get what you pay for in aviation eventually.

The original thread is about a company funded aircraft, having one aircraft you are willing to subsidise with your own time to barely break even does not count.

* Forgot to add that the tax laws concerning aircraft did change a few years ago so it pays to get accountants involved who know what they are doing. The revisions particularly involved older aircraft as i understand which is why cheap twin charter aircraft became very scarce suddenly.

[M14_P]

Very well put tailwheel. Couldn't have said it better myself. :)

[Aussie Bob]

I have owned and operated two different aircraft under a company for over 12 years. It has been an outstanding success. Every part of flying has been a tax deduction and GST free. When I am not conducting business I am taking my currency training very seriously ... I never rent or fly privately.

Having an aircraft (the first was a 172) has given me a compeditive advantage to jobs in remote areas and this is what I have specialised in. Work has taken me all over Eastern Australia by air. It has made me give prefference to jobs away from home (flying involved) as opposed to doing jobs closer to home (damn, I would have to drive for that). I have landed in wheat stubble as well as major airports.

Has an aircraft made me any money? Well no one would rent me planes for the ops I have done and I have had the benifit of operating fully maintained aircraft with no expense spared. But money, I dunno, at the end of the financial year it is just numbers on a company return that I never read. Simply put, I don't care or even want to know. The 172 was depreciated so much that when I sold it that most of the money from it was taxed at the company rate. The current aircraft will no doubt be the same.

About 120 hours per annum has been plenty for my company to make profit, pay tax and own lovely aeroplanes.

Go for it if you can.

[Clearedtoreenter]

43, yes insurance covers an agreed value for the hull and cover up to an agreed max for liabilities. Additionally carriers liability cover is required for paying passengers if the plane is used in charter. Whatever the percentage (I pay much less than 3% hull) one could probably insure said 172, outside of charter ops, for $4500.

On maintenance, yes, if you take a knackered old box of aluminium oxide to any LAME, it will probably bankrupt you. However, maintenance is incredibly variable in service price and quality and hence very dependent on the provider. I am not recommending 'deferred maintenance' at all but one needs to be entwined in some sort of 'relationship' with an honest, reliable LAME and careful that one is not paying for over servicing, poor quality and gouging.

Yes, as is not unusual here, there is a bit of thread drift. I was only making a case about the (off topic?) point made earlier that you need to do 300 hours per year before buying a plane becomes financially viable. It can be much less than that and you can control a much nicer plane than the average rental hack, which lets face it is pretty horrible in ths industry. Why are folks here so discouraging to those who might think buying and operating a plane is unattainable? Many dream of doing so and could actually do it without going bankrupt but are put of by the general horror stories, doom, gloom and misery in this industry. It can actually be a lot of fun!

Getting back on the topic. I have used a company. However, my accountant advises there is no advantage in doing so. If you use the company aircraft you have to pay the company rate. You have to be able to show that the aircraft is offered for rental to the general public and an arms length relationship in that activity. There is no way to get the tax man to pay for the director's fun! There is no value in pretending the company is the liable entity in any mishap where your negligence is a causal factor either. You will still lose your house, whether the aircraft is owned by a company or not.

[Dash8capt]

Thanks very much everyone for the replies. In regards to insurance you all really need to start looking for a broker. Im not sure why you are paying $4500 on a 172? I have been quoted $4000 per annum for a B58 Charter $250K Hull. This is with the pilot requiring 10 on type, so I wouldn't exactly say it is an out there policy that only space shuttle drivers are insured on. This was through aviation insurance australia - very helpful.

I will be seeing an accountant in regards to the matter, was just interested to hear how some others are operating.

Cheers Guys!
Happy Flying :ok:

[truthinbeer]

I haven't read all the preceding replies but in response to the original question regarding whether or not an aircraft could be purchased in a SMSF you need to consider only one thing. Does the investment pass the test of do you expect it will make a profit? If the answer is no then it is unlikely the tax office, your auditor or ASIC will consider it a bona fide investment as far as a SMSF is concerned.

[Volumex]

I was wading through the CASA register for some reason, and while I had it open I thought I would do a search for "super" in the registration holder name field. Almost 20 results came up which were obviously owned by a SMSF.
Some people must be good at making the numbers work well enough to survive being independently audited.

[FokkerInYour12]

IMHO, you should always keep the aircraft in a separate legal structure for liability reasons.

Sure, if there is gross negligence (forged Maintenance Release, clearly ignore A/Ds that contribute to an accident, unauthorised maintenance contributing to an accident etc.) then you could be held personally liable, but if you operate it professionally (use a professional maintenance company that you engage to track all time-lifed components/avionics checks etc.) then you should have no personal liability in the event of a bad event - at least to the value of the aircraft.

If you hire your aircraft to others, consider charging them an "exclusive access block" fee. This way you can feed more money into your otherwise loss making aircraft hire company.

If you (or another entity) loans money to the company to fund the purchase of the aircraft, ensure that entity is a secured creditor too.

At a Class D airport (such as Jandakot) for a fixed pitch, fixed undercarriage, 1970s/80s, for 100 hours a year, budget on outgoings of $9K/annum for outside storage... perhps another 8K if you want hangar, with large additional capital ($30+K) required every 10+ years (prop, paint etc.). For newer aircraft (Cirrus etc.) your outgoings will be more like $15-20K/annum plus hangarage.

You'd need a pretty sophisticated good business case to do this via a SMSF. I don't really think it would ever pay for itself.

I have owned aircraft that have done 450 hrs/year but Murphy's law of unscheduled maintenace always seems to gobble up the profit.

[madhun]

If it ain't fixed to the ground it ain't Business Real Property. An aeroplane fixed to the ground would be pretty useless I'd say.

If it was allowable and the use was incidental and trivial you'd get away with it.

The trustee of an SMSF can not be held accountable for poor investment decisions but I wouldn't go out of my way to lose money.

Best digging a hole in the ground and pouring money into it.

Your SMSF could own the asset and lease it to another party without concern, if it was used in your business it would be classed an in-house asset and be a major pain in the back end if it represented more than 5% of your funds assets.

Do not take this as financial advice, be sure it's appropriate for your needs, bla bla bla.