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
