I was going to ask under the “best EASA reg” thread, but it would be a bit of a drift, so I’ll start a new one.
We’re a group of three that are likely to buy a plane for mainly private use. Two are running their own businesses and one is employed. Our inclination is to set up a company (LTD) being equal shareholders, giving the two business owners the opportunity to let their companies do the purchase.
All flying would be billed out to the shareholder and booked as revenue. My concern is however if we’ll be required to maintain the plane to commercial standards (e.g. On TBO) and if we’ll be required to run the company at profit. We plan to run as close to zero as possible.
Are we missing any better setups, such as an LLP?
We, and the plane, are all UK based and reg’d.
Can you indicate the kind of proposed aircraft, and its purchase price?
mmgreve, you need professional advice. PM me and I can suggest a good aviation accountant who is very familiar with these issues. If it is primarily for private use, why are your partners buying it via their businesses? BIK is your problem. I would think an LLP would be more flexible and there is no such thing as BIK for partners. It is effectively just a syndicate you are describing, can’t see why that would attract a different maintenance approach.
I would also suggest you will be highly unlikely to get VAT registration for the structure as described.
MMgreeve does need to find an accountant familiar with these issues.
However it is useful to pick up tips here. Only then can one make full use of professional advice – and that “self education” applies to every other walk of life – like visiting your doctor or lawyer 
My recollection from my last dealings was that HMRC will not apply BIK if all pilots flying the plane are also owners. This is worth checking. Also check out whether an LLP qualifies under ANO S269 i.e. the aircraft may need a higher maintenance standard if operated via an LLP (a lawyer colleague found this in 2012).
VAT reg is pointless for a straight syndicate because while you get back the VAT on the purchase (which itself is relevant only if you are buying a plane with VAT on it – most personal sales of used planes won’t) you have to charge all the members VAT (20% extra!) on everything, for ever.
But the biggest recommendation I can make on syndicates is that you must make sure that
and probably a few other things…
So there is a lot of stuff that isn’t really to do with the plane itself
Been there and done it myself
Good morning MMG, my advice would be to consult a specialist – as has a lady been suggested – after having gleaned as much information as possible to make an informed discussion more likely.
Peter has quite correctly highlighted a number of the non-financial aspects of running a syndicate: compatibility between pilots licensing, ratings and aspirations being, in my experience, more important than the financing arrangements.
From your standpoint, the manner in which the other participants / partners / shareholders acquire their share is emphatically not your problem and I would counsel establishing the syndicate from the standpoint of a high level of objectivity: putting to one side the concern over who the purchasers of shares will be and how they’ll finance it, concentrating instead on aspects such as those mentioned in detail by Peter and how all the pilots will interact.
Whilst considering the structure to put in place, once you’ve conceded that financial gain (I.e. VAT recovery) may not be the most appropriate yardstick on which to base the syndicate, do not ignore the idea of establishing a Friendly Society, a structure which also works well in these circumstances.
The dichotomy between IFR pilots (current or aspirant) and VFR pilots (esp. of the stick and rudder kind) whilst both perfectly legitimate in their own right, has been the downfall of many a group of long standing.
Upgrades of aircraft, avionics, maintenance of existing aircraft systems will all force cracks to appear when people have to put their hand in their pockets and the comment about starting out by nickel and dime-ing arrangements is just not going to fly (pun very much intended).
A rotating chairman / administrator is worthwhile and please pay attention – in the case of the Friendly Society structure – to the need for society officers.
Finally, neither you nor your co-owners should underestimate the amount administration required when more than one person owns and aircraft and the opportunity for discord amongst them. As the old saying has it ‘them that does nowt, does nowt and them that does can do some more’ is more than apposite because all the late night paperwork falling onto one person’s desk will soon occasion a serious reality-check!
IMO getting the right people will go a long way to staving off future difficulties and, if in doubt do nothing until all of these issue have been decided upon, no matter how attractive the aircraft you all seem to want is!
A small, high quality syndicate is probably the best way to run a higher-end aircraft than a single owner could afford or a more cost effective way to run a good quality aircraft however, if does need forethought and you’ll find a a lot to help you on this forum.
All the very best.
Er oops …. ‘Has already been suggested’ obviously – wretched iPad predictive text!!!
consult a specialist – as has a lady been suggested –
A pitty, that sounded promising …
Pitty – mmmm
It’s Sunday – I’ll let you decide how iPad predictive could have dealt with those words – pitty and it’s!
And as someone who has just spent the entire morning doing bookkeeping and VAT calculations for an aviation company – OT has it right. At least in my case there is no one else shirking the work – just me.
I used to use an old copy of Sage v10 for it, when I was doing that stuff. It’s worth it even just for the VAT return.
Also I had someone write a complete online booking site, in (I think) PHP. Nowadays there are a number of options for that, and yeah that is another thing a syndicate needs to sort out. Also make sure you put in rules about one member not booking every weekend for the whole summer
