View Full Version : group share - appreciating asset for business investment?
rusty sparrow
9th Dec 2007, 16:36
Anyone know the situation re business investment (from my ltd co) in a classic aircraft? If I was to invest £5-10K as a share in a classic aircraft that might go up in value or be more secure than putting in Northern Rock, what's the situation?
Probably being over hopefull here, knowing HRMC...
RS
Pitts2112
9th Dec 2007, 16:54
You must be joking!!! You'd get a better return on your investment by burying your cash in the ground. In your neighbor's yard. Just before the crews start digging to put in the in-ground pool.
Seriously, aircraft do not appreciate in value to any great degree unless investment has been put into them. Buy a beater, spend 5 years and £thousands rebuilding it, then you will have something worth more than you paid for it, but unless you do it to something seriously vintage and collectable, you'll probably never get your money back.
Have a look at what airoplane sales and values have been like over the last year. Pitts Specials, for instance, don't seem to have moved much at all this past year and the prices for them have dropped off a bit over what they were getting in '06.
rusty sparrow
9th Dec 2007, 17:00
Basically, can I buy an acft share and put this down as a business investment while flying it?
I guess not...
Pitts2112
9th Dec 2007, 21:59
Ah, well that's an entirely different question. Drop me a PM with some more details of what you have in mind.
That's a good question.
It's probaby best not to go through the 'group-owned route' though. Either buy the aircraft yourself and/or operate it through a limited company.
In any event, it will probably only work if you need to make a loss for tax purposes but I am not an expert in these things
BackPacker
10th Dec 2007, 08:08
Not familiar with UK law, but any asset that's listed as owned by your company, and which might be used for private purposes, has the interest of the tax man, at least here in NL. A classic aircraft (as opposed to a modern utility aircraft) probably even more so.
So make sure all your flights are covered as business flights, or make sure you pay the ldt a reasonable amount for all flying time done privately.
If you really intend to use the aircraft for business, a group might not be such a bad idea. Most groups for private use see heavy usage during the weekends, but during the week the aircraft sits idle. Do make sure from the outset that the other group members know you're going to use it for business and may have a slightly different usage pattern and requirements than the other members.
wsmempson
10th Dec 2007, 08:49
I thought about this, but got worried that it would be treated as a 'benefit in kind' - like a company car - by the taxman. At the very least, you'd have to itemise the flights that were pleasure and those that were work - and justify why.
As with any tax avoidance wheeze, even if it works and is legal, as far as HMC&R are concerned, you will be attaching to yourself a large, red, flashing neon sign saying "Kick Me".
Rather like the Danish VAT twinkle, I reckon that you'd have to save a lot of money to make this worthwhile. Good luck, though.