Cirrus share
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Cirrus share
Hello all!
First post here, so please excuse me if I do something weird with my HTML, smilies, etc.
I have been considering a share for some time. Most of my flying has been on PA28s (and variants - P28R, PA28-236). However, I'm nervous about buying a bit of an ageing aircraft, and concious that PA28s aren't really that great in terms of loading, fuel economy, etc.
So - I got thinking about those lovely Cirrus machines - esp the SR-V. And then I further got thinking about the $ exchange rate at the moment. And then my (possibly wrong) train of thought went like this:
[Brain] Hey TPK!
[TPK] Wassup Brain?
[Brain] You know those shiny new SR-Vs are listed on the Cirrus site for around $190k? With Dubbya's dubious economic policies right now, you could pick one up for around £100k.
[TPK] I don't have £100k, Brain.
[Brain] Yeah, but find 3 or 4 buddies and you could be looking at a mere £20k - £25k each!
[TPK] Good work Brain!
Now, what's for dinner?
So, I guess I have a couple of questions. Has Brain "done good"? Or did he completely miss the point? Obviously, a G-reg aircraft purchased in the UK will be priced in £, and is unlikely to be priced on exchanging $1.85 for £1, what with them being built in the states and all.
Does anyone know where I can find accurate UK pricing? Are there people out there (who would/could be based at EGLK) who might be interested in a shiny new SR-V?
Are there any other obvious questions to ask at this stage in the game? (Other than the usual buy/rent, ongoing costs, group organisation questions.)
Thanks!
TPK
First post here, so please excuse me if I do something weird with my HTML, smilies, etc.
I have been considering a share for some time. Most of my flying has been on PA28s (and variants - P28R, PA28-236). However, I'm nervous about buying a bit of an ageing aircraft, and concious that PA28s aren't really that great in terms of loading, fuel economy, etc.
So - I got thinking about those lovely Cirrus machines - esp the SR-V. And then I further got thinking about the $ exchange rate at the moment. And then my (possibly wrong) train of thought went like this:
[Brain] Hey TPK!
[TPK] Wassup Brain?
[Brain] You know those shiny new SR-Vs are listed on the Cirrus site for around $190k? With Dubbya's dubious economic policies right now, you could pick one up for around £100k.
[TPK] I don't have £100k, Brain.
[Brain] Yeah, but find 3 or 4 buddies and you could be looking at a mere £20k - £25k each!
[TPK] Good work Brain!
Now, what's for dinner?So, I guess I have a couple of questions. Has Brain "done good"? Or did he completely miss the point? Obviously, a G-reg aircraft purchased in the UK will be priced in £, and is unlikely to be priced on exchanging $1.85 for £1, what with them being built in the states and all.
Does anyone know where I can find accurate UK pricing? Are there people out there (who would/could be based at EGLK) who might be interested in a shiny new SR-V?
Are there any other obvious questions to ask at this stage in the game? (Other than the usual buy/rent, ongoing costs, group organisation questions.)
Thanks!
TPK
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TPK,
The Cirrus group which I fly with has a web site here.
There is an SR20 and an SR22 Centennial. No SRV, but I can't quite see the point of those anyway because it seems perverse to get an aircraft as capable as the Cirrus and then restrict it to VFR-only.
The Cirrus group which I fly with has a web site here.
There is an SR20 and an SR22 Centennial. No SRV, but I can't quite see the point of those anyway because it seems perverse to get an aircraft as capable as the Cirrus and then restrict it to VFR-only.
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There is a Cirrus dealer in the UK - I spoke to him at N Weald show last year - whether he will pass on the favourable $ exchange rate is another matter.
Check you can G-reg a Cirrus - last time I heard, the parachute prevented this so it had to be N-reg. Practically, this means you have to get FAA licenses/ratings to get full use from it.
Also it comes without an ADF and DME; practically this makes it useless for any real UK/European flying (especially for a decent touring aircraft like this) so these have to be fitted as extras.
Check the EXACT warranty arrangements, e.g. where you have to take it for which types of work. Cirrus are not common in the UK and this can be a major issue.
Other than that, and without personal experience, it seems a great plane. It is the future, and its success in the USA assures that you will get good support in the future (in the USA, anyway). I am not keen on the 2500RPM fixed cruise setting; this is likely to show up as extra 10% or so on fuel flow, but the thing is pretty slippery to start with... I fly a TB20GT and you should look at that too; arguably it is a better choice (for performance as well as the more practical reasons such as getting people to work on it) than an SR20/22 for UK/Europe.
Check you can G-reg a Cirrus - last time I heard, the parachute prevented this so it had to be N-reg. Practically, this means you have to get FAA licenses/ratings to get full use from it.
Also it comes without an ADF and DME; practically this makes it useless for any real UK/European flying (especially for a decent touring aircraft like this) so these have to be fitted as extras.
Check the EXACT warranty arrangements, e.g. where you have to take it for which types of work. Cirrus are not common in the UK and this can be a major issue.
Other than that, and without personal experience, it seems a great plane. It is the future, and its success in the USA assures that you will get good support in the future (in the USA, anyway). I am not keen on the 2500RPM fixed cruise setting; this is likely to show up as extra 10% or so on fuel flow, but the thing is pretty slippery to start with... I fly a TB20GT and you should look at that too; arguably it is a better choice (for performance as well as the more practical reasons such as getting people to work on it) than an SR20/22 for UK/Europe.
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Fly Stimulator - looks like a well run group and an excellent website. However, I am deeply upset - I've just moved from Denham (got fed up with Grabair, plus moved house from nr Heathrow to Fleet). I also know Steve quite well.
Damn! How annoying is that!
TPK
Damn! How annoying is that!
TPK
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There may also be a VAT issue. I wouldn't be too familiar with UK VAT law, but there will be some issues to solve there. It may add 17.5%(?) to the cost. You should speak to an accountant about that, as it may be possible to avoid it.
dp
Flying accountant
dp
Flying accountant
Last edited by dublinpilot; 4th Mar 2004 at 18:25.
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Dewdrop
The VAT issue isn't that simple. Either a limited company or an individual can be VAT registered. Whether the C&E will allow you to claim back the VAT depends on the extent of it being a commercial activity. Merely running a syndicate isn't, though some reportedly do get a partial allowance. As a start, the plane needs to be rented out, and that's not what a normal syndicate does.
The VAT issue isn't that simple. Either a limited company or an individual can be VAT registered. Whether the C&E will allow you to claim back the VAT depends on the extent of it being a commercial activity. Merely running a syndicate isn't, though some reportedly do get a partial allowance. As a start, the plane needs to be rented out, and that's not what a normal syndicate does.
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I have a Cirrus SR-22 that I operate out of Cambridge for
which I'm looking for pilots interested in either taking
a share or a commitment to significant annual hours.
-- Andrew
which I'm looking for pilots interested in either taking
a share or a commitment to significant annual hours.
-- Andrew
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VAT
If your importing an aircraft to operate in the Uk on an N reg, you will have to pay VAT (and import duty).
They make you pay this now because it will be permanantly based and used here. Sadly because the way N reg trusts work, you don't legally own the plane. A US citizen or company does, who cannot be VAT registered. So you cant claim it back as input tax if your registered.
If you put it on a G reg you can, but you would have to operate it as a business, or like me tag it on the an existing business.
If your importing an aircraft to operate in the Uk on an N reg, you will have to pay VAT (and import duty).
They make you pay this now because it will be permanantly based and used here. Sadly because the way N reg trusts work, you don't legally own the plane. A US citizen or company does, who cannot be VAT registered. So you cant claim it back as input tax if your registered.
If you put it on a G reg you can, but you would have to operate it as a business, or like me tag it on the an existing business.
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Again the caveot that I'm not familiar with UK rules for VAT, but I don't see why having a US company or trust would necessarly stop you registering for VAT in the UK. In fact if it could be shown that the company was operating a VATable activity, and it's turnover was over the limits, I think it would be obliged to registrer.
Haveing said that, it would still have to charge VAT on it's "Sales" of flying hours.
If it's turnover was below the limits, and it decided to volunterly register, I'm not sure how long it would have to remain registered for, as I'm not familiar with the UK legislation.
There are some UK based accountants on this board, and I'm sure they can comment on this better than I.
In any case the figures quoted in the first post will have to be increased by 17.5% either in the initial outlay, or taken account of in the hourly rate. The VAT will have to be paid somewhere.
If UK legislation is similar to Irish, then IO540 is quite correct in what he is saying that some commerical activity must be involved. A company which simply acts as a way of splitting up the costs, is not commerical activity, and therefore not a vatable activity. Incidently if my memory is correct, the European leglisation is not as restrictive, and simply requires that an "economic activity" is carried on.
dp
Haveing said that, it would still have to charge VAT on it's "Sales" of flying hours.
If it's turnover was below the limits, and it decided to volunterly register, I'm not sure how long it would have to remain registered for, as I'm not familiar with the UK legislation.
There are some UK based accountants on this board, and I'm sure they can comment on this better than I.
In any case the figures quoted in the first post will have to be increased by 17.5% either in the initial outlay, or taken account of in the hourly rate. The VAT will have to be paid somewhere.
If UK legislation is similar to Irish, then IO540 is quite correct in what he is saying that some commerical activity must be involved. A company which simply acts as a way of splitting up the costs, is not commerical activity, and therefore not a vatable activity. Incidently if my memory is correct, the European leglisation is not as restrictive, and simply requires that an "economic activity" is carried on.
dp
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Re VAT treatment of N-reg you need to speak to some people who are actually in that line of work: N-reg registration agents can advise on the correct paperwork, and also a corporate accounting type who knows this well, not a street corner personal taxation type 
Re syndicates, an alternative to the traditional syndicate is straight renting. One or two people buy the plane and rent it to the others. Unexpected costs are well controlled during the warranty period, and after that you can do other things. It has the benefit that the owner(s) (and somebody has to be in charge; there's a lot of keep track of when owning a plane which frankly most flyers don't want to get into) have full control and getting rid of difficult people is easy. And renting is a commercial activity so you can claim back the VAT. Being a VAT registered company (best do this as a ltd. co) you have to charge VAT, but that's no worse than in a syndicate.
Re syndicates, an alternative to the traditional syndicate is straight renting. One or two people buy the plane and rent it to the others. Unexpected costs are well controlled during the warranty period, and after that you can do other things. It has the benefit that the owner(s) (and somebody has to be in charge; there's a lot of keep track of when owning a plane which frankly most flyers don't want to get into) have full control and getting rid of difficult people is easy. And renting is a commercial activity so you can claim back the VAT. Being a VAT registered company (best do this as a ltd. co) you have to charge VAT, but that's no worse than in a syndicate.
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IO540,
I fail to see how the place of registration is relevant for VAT purposes. If you trade in the UK with a VATable activity, and your turnover goes over the statuatory limits, you have to register.
No use claiming you are based outside the EU, it's irrelevant. If you are trading withing the UK with a VATable activity, and your turnover goes over the limits, you are legally obliged to register. Otherwise it distorts competition.
Imagine two firms commerically renting planes to PPL's. They are doing so commerically, and making a profit. Their turnover goes over the statuatory limits.
One company has it's planes on the G reg, and the other on the F reg, but both planes spend 100% of their time in the UK.
Do you really think the Inland Revenue would accept that the company on the F reg didn't have to charge it's customer VAT, while the one on the G reg did?
The only question, which will be a matter of fact in each case, will be whether the activity is VATable or not. The place of registration is largely irrelevant, in my opinion.
I fail to see how the place of registration is relevant for VAT purposes. If you trade in the UK with a VATable activity, and your turnover goes over the statuatory limits, you have to register.
No use claiming you are based outside the EU, it's irrelevant. If you are trading withing the UK with a VATable activity, and your turnover goes over the limits, you are legally obliged to register. Otherwise it distorts competition.
Imagine two firms commerically renting planes to PPL's. They are doing so commerically, and making a profit. Their turnover goes over the statuatory limits.
One company has it's planes on the G reg, and the other on the F reg, but both planes spend 100% of their time in the UK.
Do you really think the Inland Revenue would accept that the company on the F reg didn't have to charge it's customer VAT, while the one on the G reg did?
The only question, which will be a matter of fact in each case, will be whether the activity is VATable or not. The place of registration is largely irrelevant, in my opinion.
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DublinP
In this case the registration is between the UK and the US, which plays a mayor part in the VAT issue.
If you buy / import / keep, an N reg (US) aircraft here in the UK . It's ownership is help by either a US trust, person or company. Because as a non US citizen you cannot own the aircraft. Therefore you are not the legal owner of the aircraft (or engine if less than 750 shp).
So as a UK person or company who is VAT registered you cannot claim back any VAT on the purchase of the aircraft (beacause you don't own it).
You have to pay VAT on the aircraft if your importing it from the states, becasue it will be permanantly based and operated here. If you fly it back the the states (or a US dependantcy)and operate it there for more than 6 months of the year, you can avoid it.
As for charging VAT on renting it out. Anyone can do this if it's a commercial operation, in any EU state. There is a set turnover (sales) limit at which point you must be registered. But you can voluntarily register before this. So it's a level field across the EU.
But if you cant claim back the VAT on importing a N reg plane (to be kept on the N reg), the only point would be to claim back VAT on operating costs.
540
There are very few aviation wise accountants and any of these would know little about import issues. When I was looking at bringing a plane back from the Us (An O-2a) I talked to Customs and Excise mainly. Purchasing a used ex-military machine who's manufactured origin is outside the Uk is even more fun, when it come to import codes and valuation issues etc.
In this case the registration is between the UK and the US, which plays a mayor part in the VAT issue.
If you buy / import / keep, an N reg (US) aircraft here in the UK . It's ownership is help by either a US trust, person or company. Because as a non US citizen you cannot own the aircraft. Therefore you are not the legal owner of the aircraft (or engine if less than 750 shp).
So as a UK person or company who is VAT registered you cannot claim back any VAT on the purchase of the aircraft (beacause you don't own it).
You have to pay VAT on the aircraft if your importing it from the states, becasue it will be permanantly based and operated here. If you fly it back the the states (or a US dependantcy)and operate it there for more than 6 months of the year, you can avoid it.
As for charging VAT on renting it out. Anyone can do this if it's a commercial operation, in any EU state. There is a set turnover (sales) limit at which point you must be registered. But you can voluntarily register before this. So it's a level field across the EU.
But if you cant claim back the VAT on importing a N reg plane (to be kept on the N reg), the only point would be to claim back VAT on operating costs.
540
There are very few aviation wise accountants and any of these would know little about import issues. When I was looking at bringing a plane back from the Us (An O-2a) I talked to Customs and Excise mainly. Purchasing a used ex-military machine who's manufactured origin is outside the Uk is even more fun, when it come to import codes and valuation issues etc.
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OD,
No problem with any of that, except for the fact that I don't see what is stopping the US company registering for VAT in the uk. If it owns the aircraft, and carries on a VATable activity (which will depend on the circumstances of each case), then it can registrar in the UK for VAT.
In my example above of the two companies renting out planes to PPL's, it wouldn't make any difference to the VAT position if one of the companies was registered in the US (or Uzbeckistan for that matter), and the other in the UK. It's the place of supply of the VATable activity that counts, and not the place of registration of the company.
Of course this is assuming that the US company is carrying on a VATable activity in the UK.
Anyway, the point of my first post on this topic was to point out to the thread starter that he needs to consider the VAT with a professional advisor. In all likelyhood with will have to pay the VAT either on import or on the hourly rate, and it will add 17.5% to his budgets; not an insignificant sum.
No problem with any of that, except for the fact that I don't see what is stopping the US company registering for VAT in the uk. If it owns the aircraft, and carries on a VATable activity (which will depend on the circumstances of each case), then it can registrar in the UK for VAT.
In my example above of the two companies renting out planes to PPL's, it wouldn't make any difference to the VAT position if one of the companies was registered in the US (or Uzbeckistan for that matter), and the other in the UK. It's the place of supply of the VATable activity that counts, and not the place of registration of the company.
Of course this is assuming that the US company is carrying on a VATable activity in the UK.
Anyway, the point of my first post on this topic was to point out to the thread starter that he needs to consider the VAT with a professional advisor. In all likelyhood with will have to pay the VAT either on import or on the hourly rate, and it will add 17.5% to his budgets; not an insignificant sum.
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I vaguely recall discussing this with a N-reg registration agent a while ago. There is a difference between a US trust (which I believe already exists and may handle a number of planes) and a US corporation (which you set up). There are problems with the latter, in that the aircraft is expected to spend >6 months a year in the USA.
Best to speak to an N-reg agent - there are a few about, Avcorp and Anglo Trust in Jersey are two I can think of.
By far the best way is for a US citizen that you know and trust, to own the plane, and rent it to you.
Best to speak to an N-reg agent - there are a few about, Avcorp and Anglo Trust in Jersey are two I can think of.
By far the best way is for a US citizen that you know and trust, to own the plane, and rent it to you.
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Well that makes a bit more sense then.
So the problem is not with the US company registering for VAT in the UK, and claiming it back. The problem rests with the fact that the US company can not own the aircraft, unless it spends >6 months in the US.
I fully accept that a trust owning a number of aircraft for different owners is a different vehicle altogether. Clearly such a trust would find it very difficult to manage a trading activity in the UK. And even if it did, it would have difficulty returning the benefit of the VAT claim to the beneficial owners of the aircraft.
However having said all that, it should still be possible, with the trust company's support, to set up the appropriate leasing structure to have the VAT interest in the aircraft in the UK. Though once again, any sales would be liabile to VAT.
dp
So the problem is not with the US company registering for VAT in the UK, and claiming it back. The problem rests with the fact that the US company can not own the aircraft, unless it spends >6 months in the US.
I fully accept that a trust owning a number of aircraft for different owners is a different vehicle altogether. Clearly such a trust would find it very difficult to manage a trading activity in the UK. And even if it did, it would have difficulty returning the benefit of the VAT claim to the beneficial owners of the aircraft.
However having said all that, it should still be possible, with the trust company's support, to set up the appropriate leasing structure to have the VAT interest in the aircraft in the UK. Though once again, any sales would be liabile to VAT.
dp