FAA Licence Holder in UK

[excrab]

So if you are flying an aircraft owner (private operations) but are paid for this (commercial activity), you need a validation or Part-FCL licence to legally fly.

That is taken from the CAA website, and the whole thing seems extremely confusing. I hold an FAA ATP certificate (multi-engine land). Is this saying that if the owner of an N reg aircraft wants to pay me to fly him in his aircraft I first have to have a validation of my FAA certificate by the CAA, or a need a CAA issued licence. Does that therefore imply that I could be paid for pilot services flying an N reg aircraft under IFR if I didn’t hold an FAA licence, but only a U.K. licence. But then I get even more confused. I also hold a U.K. issued ATPL with a valid MEP rating. Do I still have to do some sort of oral exam (and pay the CAA fees) to prove my knowledge of U.K. procedures before I can exercise the privileges of my FAA certificate in an N reg aircraft despite the fact that I have in the past proved that knowledge for the issue of my U.K. PPL, CPL, and eventually ATPL (three sets of exams covering U.K. air law etc). My FAA ATP is a full license issued in the US, not a piggy back on my U.K. licence.

Once upon a time the holder of an ICAO licence could automatically exercise VFR privileges in a G reg aircraft. Why did that have to be changed ?