Permit aircraft & "hiring" advice
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Join Date: Aug 2003
Location: European Administrative Area (Western District and Islands)
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Permit aircraft & "hiring" advice
Hi, I've just had to sell my 1/3 share in a group aircraft (a Yak on a permit) and am extremely sad, as I founded the group. Utilisation is relatively low, and there seems to be a concensus within the group to allow me to continue to fly it as a non shareholder, as the insurance cost would be negligible to keep me on it. We pay a dry hourly rate into the AC's funds and it would seem to be fair to this to be increased for me as a non-owner.
My question is that such an arrangement would seem to be "hiring" which is obviously not permitted for a permit AC. I was wondering if anyone else had experience of such a situation and whether there was a practical yet legal way around it?
Any advice appreciated!
SS
My question is that such an arrangement would seem to be "hiring" which is obviously not permitted for a permit AC. I was wondering if anyone else had experience of such a situation and whether there was a practical yet legal way around it?
Any advice appreciated!
SS
It almost certainly would be regarded as hiring.
Obvious solution - the group sells you a 1/20th share for £1, with a contract that only allows you to sell it back to them at the same price, and gives them the right to "compulsorily purchase" at any time. (Tweak numbers to suit everybody).
G
Obvious solution - the group sells you a 1/20th share for £1, with a contract that only allows you to sell it back to them at the same price, and gives them the right to "compulsorily purchase" at any time. (Tweak numbers to suit everybody).
G
Join Date: Sep 2002
Location: Savannah GA & Portsmouth UK
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Artickle 162 0f the ANO is waht you need:-
etc. etc.
Basically you need to own at least 5% so if you retained a 5% share you'd probably be OK but you'd need to read the article in more detail to make sure you comply. I can't see anything that says you can't pay more than your percentage of the fixed costs, e.g. if you own 5% but pay 10%. You are however not allowed to pay more than the direct costs of the flight so you would need to be able to justify the hourly rate as being no more than the direct costs of the flight.
As for what would happen if you had a 5% share but the other group members had the option to purchase if from you for the sum of one pound on demand............?????
I think you have to watch out for the spirit of the law, which is designed to prevent flights being treated as Private when they don't qualify as such.
disclaimer - I'm no lawyer and you should not rely on my advice
Mike
Public transport and aerial work - exceptions - jointly owned aircraft
162 (1) A flight shall be deemed to be a private flight if the aircraft falls within paragraph (2) and the only valuable consideration given or promised in respect of the flight or the purpose of the flight falls within paragraph (3).
(2) An aircraft falls within this paragraph if it is owned:
(a) jointly by persons (each of whom is a natural person) who each hold not less than
a 5% beneficial share and:
162 (1) A flight shall be deemed to be a private flight if the aircraft falls within paragraph (2) and the only valuable consideration given or promised in respect of the flight or the purpose of the flight falls within paragraph (3).
(2) An aircraft falls within this paragraph if it is owned:
(a) jointly by persons (each of whom is a natural person) who each hold not less than
a 5% beneficial share and:
Basically you need to own at least 5% so if you retained a 5% share you'd probably be OK but you'd need to read the article in more detail to make sure you comply. I can't see anything that says you can't pay more than your percentage of the fixed costs, e.g. if you own 5% but pay 10%. You are however not allowed to pay more than the direct costs of the flight so you would need to be able to justify the hourly rate as being no more than the direct costs of the flight.
As for what would happen if you had a 5% share but the other group members had the option to purchase if from you for the sum of one pound on demand............?????
I think you have to watch out for the spirit of the law, which is designed to prevent flights being treated as Private when they don't qualify as such.
disclaimer - I'm no lawyer and you should not rely on my advice
Mike
Join Date: May 2005
Location: Suffolk
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He's a natural person unless he's a limited company or a "corporation sole", such as a bishop. This is a problem for clergy, if flying in their episcopal capacity, but shouldn't bother most other people.
