aircraft ownership - own limited company or private?

[Sam Rutherford]

I am interested to know whether 'most' private owners (including group ownership) are set up as an owning company, or are directly owned personally.

I have opted for the company option (I have 100% of shares in said company), but have no idea if everyone else does the same (for similar reasons to my own)?

Thanks for any feedback.

Sam.

[airborne_artist]

What advantages would there be to operating a private, non-AOC aircraft via a Ltd. Co.?

[IO540]

Massive threads on this subject here already.

[IO540]

An LLP is no good for this because an LLP is explicitly required to make a profit, whereas a Ltd Co has no such requirement.

But I cannot see any point in holding a plane (flown by the one single pilot who also owns the business) in its own limited company. There seems to be no benefit in terms of either accounting or legal liability.

Perhaps there is an obscure one, in separating the 'pilot' from the 'operator'. Any injured party would try to get around that one by trying to prove pilot negligence...

[BoeingMEL]

This old-stager always chose the limited company route. (Imagine for a moment that through negligence, an accident occurred involving damage to property and/or death or injury. Now consider the implictions of the insurer refusing to indemnify the pilot/owner/operator... as well they might.

You could face personal liability claim(s) and lose everything.. your home, possessions etc. You can buy a limited company for about £35 if you search around. Worth it? I'd say 100% yes! Cheers bm:rolleyes:

[Mikehotel152]

May I display my complete ignorance for a second and creep the thread slightly?

There are plenty of pilots flying commercially on contracts with the likes of Ryanair, rather than being employed directly by them, who are effectively self-employed. In those circumstances, would it make any sense to create a Ltd Liability Company and be employed by your company? IIRC it meant you got taxed at company rather than personal rates and you could claim VAT back on some purchases.

I know people used to do it 10 years ago in Financial and IT services but I think HMRC closed the loophole. :cool:

[airborne_artist]

MH152 - an IR35 (the name of the ruling) compliant contract must enable substitution, ie, the contract is for the supply of a skillset, not a named individual. In the case of a pilot working for an airline, that's very hard and costly to achieve.

[Mikehotel152]

I have an alter ego who would willingly step into any gap caused by my illness. In fact, he's a better, more professional pilot than I. Sometimes I wish he were around more often...:O

[IO540]

Firstly, IR35 or any other HMRC rule is nothing to do with aviation liability limitation.

It's true that placing a plane into a Ltd Co exposes the Ltd Co proprietor to a BIK attack from HMRC. There are various defences to this, some of which HMRC like and some they don't like and pretend they don't exist and waste a couple of years of your life hassling you until you give them a big cheque and then they p*ss off and leave you alone for a few years....

This old-stager always chose the limited company route. (Imagine for a moment that through negligence, an accident occurred involving damage to property and/or death or injury. Now consider the implictions of the insurer refusing to indemnify the pilot/owner/operator... as well they might.

You could face personal liability claim(s) and lose everything.. your home, possessions etc. You can buy a limited company for about £35 if you search around. Worth it? I'd say 100% yes

Well it depends. My vague recollection of the Civil Aviation Act is that the operator has strict liability for any damage on the ground, but negligence has to be proved to create a liability to passengers.

Now, if the pilot owns the company, is he or the company the operator? A good Q.

The other thing is that if a Ltd Co is forced into liquidation (through a liability) and there are insufficient assets to pay off the liability (pretty obvious really otherwise it would not have been forced into liquidation) the liquidator has the power to pursue its officer(s) for a contribution! If you didn't take out insurance, or failed in your duty to keep the paperwork straight (enabling the insurer to not pay out), or even took out insufficient insurance, then as a Director you are personally liable.

So while a Ltd Co is probably good in some very narrow scenarios (in the single pilot case discussed) I suspect these are very contrived.

There is no doubt a Ltd Co is worth having in a multi pilot scenario, to protect one shareholder from the actions of another. But the Director of the company has still got to carry out his proper duties...

One heard stories of insurers not paying out but actually this is rare in aviation, if the pilot and the plane has the right papers. Negligence is certainly insured.

[Permanent Standby]

Firstly excuse my ignorance. I am about to purchase an aircraft with a friend of mine - what benefits are there to setting up a ltd company for ownership as opposed to just owning the aircraft 50/50? It will be a closed group (just 2 of us insured on it) and wont be used/leased for any public transport category flying...