Death, taxes and business jets
The main driver in any financial transaction should not be avoiding tax. As Warren Buffet wrote: “Ultimately there are three ways to avoid a tax: (1) to give the asset away, (2) to lose back the gain; and (3) to die with the asset – and that’s a little bit too ultimate for me.” He added: “Even the zealots would have to view this ‘cure’ with mixed emotions.”
Whilst no one should pay more tax than they need – and you would be a fool to not look into the options – if you are finding that most of the conversations about buying or financing your helicopter or business jet are about saving tax someone (perhaps you) is over-complicating things.
Often simple, sensible, things can save more than complex structures.
From 2011 importers of business jets in the UK will need to pay 20% Value Added Tax on the cost of business aircraft; unless the aircraft is used for charter. One way of managing this is to get your aircraft on to an Aircraft Operating Certificate. The easiest way to do this is hire an aircraft manager or operator to look after your aircraft. Even better you will then save on mineral taxes (which can be 80% of fuel costs) and operating expense VAT saving you money each month.
The benefits of using an aircraft manager – like TAG, Gama, Hangar8 or others – who can also negotiate bulk insurance policies and other discounts, are already clear. But from the start of 2011 the straightforward tax savings alone make it even more compelling.