Is this legal?

[Datcon]

Some mates of mine want to use my aircraft and are prepared to pay an hourly rate in proportion to the annual costs. We all know roughly what it costs me per hour over a year so we'd agree that with no problems.
I'm happy to let him them. One's a very high hours PPL and the other's a commercial pilot so there'd be no problem getting them put on the insurance.

Would I be breaking any law if I took payment?
The aircraft's on a Permit.

I want to be cast iron legal. I'm not into taking a chance nobody will find out.

Thanks in advance.

[Genghis the Engineer]

Unless it's a single seater under 910kg MAUW, it's technically illegal hire, but you can make it legal quite easily.

If you sell them each a 1/20th share at a nominal sum - say £1, and they contribute their fair share of operating costs, you're fine. To cover the realities of the situation, knock up a quick contract of sale that says they can only sell it back to you or your heirs and successors for the original sale price unless you agree otherwise in writing - and pretty much everybody is covered.

G

[bookworm]

I'd be concerned about the "nominal sum". That might cause some issues if it were challenged. Why not ask them to buy the share at 5% of its market value? -- then you have a thousand or so quid of deposit to boot. If someone were offering me a nice deal like that, I'd be only too happy to lay down some capital of that magnitude.

(I'm not familiar with the rules on Permit aircraft, but presume that the same rules on PT and Aerial Work apply as if they were Private Category C of A aircraft. Is that right, Genghis?)

[Genghis the Engineer]

(I'm not familiar with the rules on Permit aircraft, but presume that the same rules on PT and Aerial Work apply as if they were Private Category C of A aircraft. Is that right, Genghis?)

Not quite - basically PT and Aerial work is totally verboten in PtF aeroplanes, except for:-

- Instruction of sole owner
- Type conversions.
- Hire of type-approved microlights solo
- Instruction in type-approved microlights.

That's basically it. But, as with anything else, cost-sharing between syndicate owners is perfectly legitimate. So more restrictive in some areas, less in others than a private CofA.


The single seat rule I mentioned is something else. Basically there's a clause buried in the ANO [ 130(2)(c) I think from memory] that says hire of a single seater with an MAUW under 910kg is not considered aerial work. This is used, for example, by the Tiger Club to hire out it's Rollason Turbulents.

G

[robin]

Not sure I understand this

If I own a permit type and wish to continue to own it outright, but friends are willing to join a group (no capital, but share of expenses+hourly rate)

Earlier Bookworm suggested selling a capital stake, but I prefer the option of the non-capital route, as I retain control over the aircraft

What is wrong with selling a nominal stake and setting up an agreed monthly to cover expenses+flight time?

[bookworm]

Not quite - basically PT and Aerial work is totally verboten in PtF aeroplanes, except for:-

- Instruction of sole owner
- Type conversions.
- Hire of type-approved microlights solo
- Instruction in type-approved microlights.

That's basically it. But, as with anything else, cost-sharing between syndicate owners is perfectly legitimate. So more restrictive in some areas, less in others than a private CofA.

I really don't follow this. The provision to allow aircraft without a PT CofA to be run as a group is an exemption from Art 130 2(c). That's where the 1/20 bit appears.

Are you saying that you can do anything you can in a private CofA aircraft plus the bullet points above? Or that some of the exemptions for private CofA aircraft do not apply to PtF aircraft. If the latter, why do you believe cost-sharing between syndicate owners is legitimate?

Earlier Bookworm suggested selling a capital stake, but I prefer the option of the non-capital route, as I retain control over the aircraft

What is wrong with selling a nominal stake and setting up an agreed monthly to cover expenses+flight time?

What you\'re suggesting is pretty much indistinguishable from a commercial hire arrangement. I think you (and in particular Datcon, who\'s looking for "cast iron legal") would run into difficulty over the interpretation of a "5% beneficial share", which is required for a group funds arrangement. A piece of paper saying "5% stake" which I can\'t sell for 5% of the value of the asset and which gives me no control over the disposal of the asset doesn\'t sound like a 5% beneficial share to me. I have no idea if it has ever been tested in court.

[Hoverman]

Genghis

Please could you explain how the Type Rating exception works viz a viz permit aircraft, aerial work and public transport.

Can a PPL train and check out another PPL in a Permit aircraft and charge for the use of the aircraft?

Can a CPL who does that charge for his services?


====================

I've seen adverts for Harvard rides at Shoreham in the aviation mags for years. I assume Harvards being warbirds are Permit aircraft and I assume it must be legal or they wouldn't be advertising in the aviation mags. How do they do it legally?

[Mike Cross]

If you study the ANO carefully I suspect you will find you can teach your octagenarian auntie to fly if you want to however........

The instruction will only count towards the grant or renewal of a license or rating if you posess the requisite rating.

A PPL FI can instruct but not be paid for doing so. An FI with a CPL or higher can be paid.

A checkout can be done by anyone providing he is not being paid for doing it.

If the user pays for the hire of the a/c it needs a Transport Cat C of A unless he owns a minimum of 5% share in the aircraft and what he is paying covers his fair share of the operating costs.

If 4 or less are in the aircraft they can pay in proportion (i.e. 4 in the aircraft they each pay a quarter including the pilot).

All from memory and subject to the usual caveats.

Article 9A of the ANO is the one to read re Permits.

(2) (a) Subject to sub-paragraph (c), an aircraft flying in accordance with a permit to fly pursuant to article 8(2)(e) shall not fly for the purpose of public transport or aerial work other than aerial work which consists of flights for the purpose of flying displays, associated practice, test and positioning flights or the exhibition or demonstration of the aircraft.
(b) No person shall be carried during flights for the purpose of flying displays or demonstration flying, except the minimum flight crew unless the prior permission of the CAA has been obtained.
(c) With the permission of the CAA, an aircraft flying in accordance with a permit to fly pursuant to article 8(2)(e) may fly for the purpose of aerial work which consists of the giving of instruction in flying or the conduct of flying tests, subject to the aircraft being owned or operated under arrangements entered into by a flying club of which the person giving the instruction or conducting the test and the person receiving the instruction or undergoing the test are both members.

[Genghis the Engineer]

Ye gods, where do I start. Well, I'll give it a shot:-

Please could you explain how the Type Rating exception works viz a viz permit aircraft, aerial work and public transport.

For a start type ratings are a completely separate issue. You either need a type rating (such as for an R44 or a Hawker Hunter) or you don't (let's say for a Europa).

To gain a type rating, or a licence (say moving from NPPL(M) to PPL(SEP) this can be done by an FI on a PtF or Private CofA aircraft solely owned, or on any Public CofA aeroplane. There are exceptions to this, for which CAA has granted exemptions - for example type-approved microlights, or certain warbirds used for conversion training (JPs etc.).

Can a PPL train and check out another PPL in a Permit aircraft and charge for the use of the aircraft?

I'll use the terms trainee and trainer here or I'll disapear up my backside in terminology. If the trainee is technically rated for the aircraft but no hours on type, then they can be checked out on that type by another PPL who is. But, they cannot pay/charge for this, nor can anything be paid for use of the aircraft except the actual running costs.

Can a CPL who does that charge for his services?

Only if they hold an FI rating valid for the aircraft type.

I've seen adverts for Harvard rides at Shoreham in the aviation mags for years

The majority are on Permits, but a few are on Public CofA - presumably including those being advertised.


I don't see personally a problem with a nominal stake, because English contract law only requires that something of tangible value, satisfying both parties, changes hands in both directions for a legal contract. There is nothing to stop me selling you my house or one of my aeroplanes for £1 so long as I am satisfied that this was fair exchange. Nobody but the parties to that contract are, so far as I understand, considered qualified to judge what constitutes fair value.

Where's Flying Lawyer when you need him?

G

[Gertrude the Wombat]

Nobody but the parties to that contract are, so far as I understand, considered qualified to judge what constitutes fair value.

Unless, of course, you enter into a series of artificial transactions which the tax man decides is designed solely to avoid tax, in which case the tax man considers himself qualified to judge that the whole caboodle has no legal validity whatsoever (for tax purposes). Quite possible the CAA has fewer powers than the tax man in this regard, but talking to a lawyer might indeed be a good idea.

[bookworm]

Article 9A of the ANO is the one to read re Permits.

Thanks Mike, I think that effectively answers the question I posed. If Article 130 determines the flight to be a private flight, you can make the flight in a PtF aircraft. In addition, flying displays and instructional flying are permitted subject to the conditions in Art 9A, but these would count as Aerial Work and would require appropriate licences etc.

[Datcon]

Thanks for your help. Looks like it's a non starter. I dont want to sell a proper share and the nominal share for a £1 doesn't pass my cast iron legal test.

One more question and sorry if I'm being thick but some people seem are saying there can never be payment for an aircraft unless it's PT category and others are saying there can be payment as long as they all belong to the same club.
If an owner of a Permit aircraft formed a club, a CPL could be paid for giving taildragger tuition to qualified PPLs as long as they all belong to the club but can the owner of the aircraft be paid for the use of the aircraft.
I can't see the point of the club exemption otherwise. Is it only an exemption if the owner gives the use of his aircraft to the club free of charge?

[Genghis the Engineer]

If an owner of a Permit aircraft formed a club, a CPL could be paid for giving taildragger tuition to qualified PPLs

Not unless they already hold taildragger differences training - otherwise it is "training for issue of a licence or rating", which isn't permitted.

can the owner of the aircraft be paid for the use of the aircraft.

Not unless:

(1) It's a type approved microlight (say a Thruster T600T), or

(2) It's a single seater under 910kg MAUW.


Incidentally I know from an extremely reliable source that PFA and BMAA are trying to change this at the moment, but aren't getting very far at present.


G

[bookworm]

If an owner of a Permit aircraft formed a club, a CPL could be paid for giving taildragger tuition to qualified PPLs as long as they all belong to the club but can the owner of the aircraft be paid for the use of the aircraft?

No. The exemption in 9A 2(c) only permits aerial work, and envisages this as the instructor getting paid for the instruction. If someone pays a "hire fee" for an aircraft, other than single seaters < 910 kg, or under the exemption of chipping in to group funds as a joint owner of at least 5% of the aircraft, the flight becomes public transport for airworthiness purposes.

I can't see the point of the club exemption otherwise.

I think it envisages that the recipient of the training would be at least a joint owner. Without the exemption, they could not receive remunerated instruction in the aircraft.

[Bluebeard777]

Regarding suggestions above for the sale of a 5% interest in an aircraft, is there not a requirement somewhere in the regulations for a jointly-owned aircraft to be owned in equal shares? Thus 2 owners must own 50% each, three 33% each etc.

[Heliport]

No. There's no such requirement.

[MLS-12D]

I don't see personally a problem with a nominal stake, because English contract law only requires that something of tangible value, satisfying both parties, changes hands in both directions for a legal contract. There is nothing to stop me selling you my house or one of my aeroplanes for £1 so long as I am satisfied that this was fair exchange. Nobody but the parties to that contract are, so far as I understand, considered qualified to judge what constitutes fair value.

I believe that you are essentially correct, save and except for tax issues (as Gertrude pointed out), and fraudulent conveyances intended to place one's assets beyond the reach of creditors. Such statutory exceptions aside, when considering whether a contract is binding at common law, the courts are concerned with whether there is consideration and not with its adequacy. But in many common law jurisdictions, mere nominal consideration may not be enforceable if it is considered a pretense or sham transaction. See generally "The Peppercorn Reconsidered".

Where's Flying Lawyer when you need him?

Alternatively, I am sure that FNG could provide comprehensive and reliable advice. Unfortunately, he is no longer with us, through no fault of his own.

is there not a requirement somewhere in the regulations for a jointly-owned aircraft to be owned in equal shares?

First I've heard of it. I don't see the point (not to imply that bureaucrats always have a point for their regulations).

[robin]

Looking at correspondence above and on the PFA BB

http://www.pfa.org.uk/cgi-bin/ultima...138;p=1#000014

There seems to be an issue about ownership and ability to function with PtF aircraft

On the one hand PFA are going to insist all group owners of a PFA aircraft are PFA members. This means all who are owners of shares in the plane

On the other hand, if one person owns an aircraft and forms a group to operate a PFA aircraft, then lets other by being group membrs fly it at a given rate, it appears that is illegal as it could be considered a commercial activity

So if I own a permit aircraft, cos I have shedloads of money, but I have a friend or two who might want to fly it, but they can't afford any capital input, just share of cost and flight time - is that illegal?

If it is, how do poor bods get a chance to fly?