paymant and FAR 91
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paymant and FAR 91
Hello sirs,
the CEO of the company where I work, would like to allow the use of company aircraft for private use to all the executive managers. The question that he did to me is: can we ask to the managers to pay for fuel and taxes?? We don't look for get money just to pay the expenses.
The aircraft is N registered.
the CEO of the company where I work, would like to allow the use of company aircraft for private use to all the executive managers. The question that he did to me is: can we ask to the managers to pay for fuel and taxes?? We don't look for get money just to pay the expenses.
The aircraft is N registered.
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Yes you can under lease/sharing agreement. Basically you can charge for all the expenses directly related to each individual flight including crew expenses and additional 100% of the fuel cost.
Now having said that, you need to have a law firm with good aviation law background to make up the lease agreements. The leases must be on file with your local FSDO and be carried on the aircraft at all times during any of the"leasing" flights.
Note of extreme caution. This only works in the United States. This type of operation is considered 135 in the EU and most of the rest of the world.
For more details please PM me.
Now having said that, you need to have a law firm with good aviation law background to make up the lease agreements. The leases must be on file with your local FSDO and be carried on the aircraft at all times during any of the"leasing" flights.
Note of extreme caution. This only works in the United States. This type of operation is considered 135 in the EU and most of the rest of the world.
For more details please PM me.
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I don't think that you will be able to do this in the UK.
Under article 138 of the Air Navigation Order the operator of a non EU registered aircraft needs the permission of the Secretary of State to operate in the UK if any valuable consideration is given or promised in respect of the carriage passengers. I believe that permission would only be given to aircraft operated under an AOC.
Under article 138 of the Air Navigation Order the operator of a non EU registered aircraft needs the permission of the Secretary of State to operate in the UK if any valuable consideration is given or promised in respect of the carriage passengers. I believe that permission would only be given to aircraft operated under an AOC.
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It gets worse
You are about to enter a world of pain.
Not only do you need your business lawyer looking at this but I would strongly advise talking with an experienced tax advisor. One with an aviation based practice.
Structuring leases as you have been advised will almost certainly ensure that any tax depreciation your company is (or has) taking on the aircraft will be affected. You need to understand the consequences, especially if any of the managers use the flights for anything not 100% business related, including travelling with the wife (and/or kids) to a business meeting.
The IRS view of the activity is in no way related to the view the FAA takes via the FAR's. What you structure may be OK and legal under part 91 but could be treated as charter income by the IRS...it is a minefield.
Good luck......... your next ramp inspection will be nothing put pleasure compared to the journey you're embarking upon....
Not only do you need your business lawyer looking at this but I would strongly advise talking with an experienced tax advisor. One with an aviation based practice.
Structuring leases as you have been advised will almost certainly ensure that any tax depreciation your company is (or has) taking on the aircraft will be affected. You need to understand the consequences, especially if any of the managers use the flights for anything not 100% business related, including travelling with the wife (and/or kids) to a business meeting.
The IRS view of the activity is in no way related to the view the FAA takes via the FAR's. What you structure may be OK and legal under part 91 but could be treated as charter income by the IRS...it is a minefield.
Good luck......... your next ramp inspection will be nothing put pleasure compared to the journey you're embarking upon....
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GlexDriver
Firstly you list FAB/EGLF as your base? If you are FAR91 irrespective of where you are based, you still have to apply IRS applications. This is one heck of a hell hole. The only way to go is to consult your corporate tax lawyers who can gain superb assistance from the tax specialists at NBAA in DC. I doubt if you are not a NBAA member, so use the folks in DC, they hold tax seminars around the US.
Charging from Flt Dept to individuals and/or depts within an organization is a normal practice.
Good luck & enjoy FAB this summer.
Check www.NBAA.org, if not a member JOIN TODAY
Charging from Flt Dept to individuals and/or depts within an organization is a normal practice.
Good luck & enjoy FAB this summer.
Check www.NBAA.org, if not a member JOIN TODAY
Last edited by merlinxx; 17th Apr 2007 at 05:57.
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merlinxx
Actually we are based in the US but we spend more time in europe that in the US. I gave your information to aour boss, and I think that CEO's wife should find another way to make shopping.
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Not only do you need your business lawyer looking at this but I would strongly advise talking with an experienced tax advisor. One with an aviation based practice.
Having said that, HyFlyer's last sentence is totally correct. You may wish you steered well clear of this episode.
Good luck!
