Buying an aircraft doesn’t have to be complicated. However, with more jurisdictions waking up to the need for economic substance, it needs a thorough, measured approach that considers every layer of complexity. What appears to be the quickest, least expensive and easiest option – as attractive as it may initially look – is unlikely to be the best way to secure the asset and owner interests and it may be a costly path to tread in the long run.
As a private wealth specialist, I’ve witnessed the aftermath of owners rushing to create an asset-holding company in particular jurisdictions off their own bat and without due consideration as to how it might affect them from a personal tax point of view – not to mention a raft of other costly legal complications. Authorities are increasingly making sure problematic structures are hard to unravel and re-do at a later date. Remaining within the law and planning properly when buying an aircraft is therefore more pertinent than ever.
In the latest edition of Family Office Magazine, released last month, I outline several key factors to consider when making that all-important purchase to help ensure compliance with economic substance requirements – from deciding whether the aircraft will be used commercially to ensuring good governance within the ownership structure.
Approached in the right way, the journey towards buying an aircraft should be smooth, efficient and, above all, exciting.
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