TVPX, the provider of 1031 exchange services that allow owners to defer tax, has launched new Federal Aviation Administration aircraft registration and owner trust services. The new services are designed to help foreign aircraft owners who wish to use the US FAA aircraft registry.
Many non-US owners have used Non-Citizenship Trusts to register aircraft in the US, however in 2013 new clarification for foreign companies and individuals came into effect.
“Recent clarifications of aircraft registration policy have made the registration process for non-US citizens more challenging,” said Tobias Kleitman, President of TVPX. “Our extensive experience in documenting and closing thousands of tax-related aircraft transactions through the FAA makes us uniquely qualified to offer quality, cost-effective FAA owner trust services. We are eager to help aircraft owners solve their FAA registration issues.”
“Our extensive experience in documenting and closing thousands of tax-related aircraft transactions through the FAA makes us uniquely qualified to offer quality, cost-effective FAA owner trust services. We are eager to help aircraft owners solve their FAA registration issues.”
TVPX will handle all documentation and status updates to avoid owners from missing future FAA notices. TVPX will also work with client advisors to tailor documents to specific needs with simple and competitive fee structures.
“Our FAA-approved owner trust documents, streamlined transactional processes, and close, professional working relationships with aviation attorneys, escrow companies, lenders, manufacturers, brokers and dealers allow us to provide an unsurpassed level of service to our clientele,” said Jeffrey Towers, Vice President and General Counsel of TVPX.
We asked Jeffrey Towers five questions about the new service:
Corporate Jet Investor: The NCT rules came into effect last year, how long have you been thinking about offering this service?
Jeffrey Towers: We have been seriously considering starting an owner trust business for three or four years. It always seemed like a reasonable “fit” for TVPX and in fact other business aviation professionals had from time to time expressed the same idea to us. We held off actually launching the business until there was greater certainty about the FAA’s position on NCTs.
Corporate Jet Investor: Most people find the 1031 Exchange regulations pretty complicated, the same is true with Non-Citizenship Trusts? Are you not tempted to do something simple?
Jeffrey Towers: You are correct that the 1031 exchange rules and the regulations relating to NCTs are each complicated in their own right. We took our time learning the details about owner trusts and working with our FAA counsel to draft our documents. Aircraft exchanges and owner trusts are both document intensive tasks that require a thorough working knowledge of the aircraft transaction closing process. We know how to draft documents efficiently and accurately and we are very familiar with the parties and the processes involved in aircraft closings. While there are several capable and well respected companies that currently offer owner trust services, there is not a large pool of providers and we felt we could step in and provide a quality product.
Corporate Jet Investor: Are you looking at adding any other new services?
Jeffrey Towers: For the time being we are going to focus on building our 1031 exchange business and the new owner trust business.
Corporate Jet Investor: Can you explain a 1031 Exchange in less than 100 – simple – words?
Jeffrey Towers: 1031 exchanges allow US taxpayers to defer the tax that results from the sale of a depreciated aircraft, if the owner replaces its aircraft. Forward exchanges are used when the sale precedes the purchase and reverse exchanges are used when a purchase precedes a sale. The process must be strictly followed or the exchange will be invalid.
Corporate Jet Investor: Brilliant and that was just 57 words. Can you do the same with Non-Citizenship Trusts?
Jeffrey Towers: Non-Citizenship Trusts or NCTs are used to assure that aircraft are legally registered and operated under US law. The Regulations generally require that aircraft may only be registered by US citizens. For a variety of reasons, many people who are not “citizens” under the Regulations still wish to register their aircraft in the US. The Regulations allow US citizens to hold title aircraft as trustees for a person or company that does not satisfy the citizenship requirements.