Seeking advice, buying a plane.

[ArcticKat]

Greetings Group.

I have a request e-mailed into TC but haven't gotten a response yet so I thought I'd ask here in the interim.

I'm looking at buying a plane, maybe 2. One would be a smaller cheap 2 seater, something like a C150. The other a larger plane like a Saratoga.

I have been considering purchasing these planes through my business, even though they won't be used for anything more than transportation for me and my family or friends on a personal and recreational level for the most part. I or qualified friends would be the only pilots.

Here are my questions:

• If I purchase a plane through my business, does it require registration as a Business Aviation Operation with Transport Canada and become regulated as such?
  
  From my research I've found vague references that to be considered Business Aviation a company must have 3 or more aircraft or that the aircraft in Business Aviation are more complex, such as small jets or turboprops. Would a C150 or a 'toga be considered complex enough, or is the complexity of the aircraft irrelevant?
  
  I might actually use a plane to travel to business related meetings or work sites and declare the travel expense. Would this put it into the Business Aviation Category?
  
  Finally, just how much more regulated is Business Aviation over Private? Would it be worth the hassle for me to acquire a Business Aviation Certification, or just register my plane as a Private?

[trey kule]

Well this should put a smile on your face. Those airplanes can be owned by a business AND registered as private aircraft.

the whole CBAA thing only applies (or did) to a limited number of aircraft... You can search CARS 604 if you are interested.

TC, I dont think, gives a rat's p'tooey who owns what for the most part, as reistrations are done in the operators name (commercial) and not the owners.(just to be accurate, there is some paperwork required by the owner)

Buy em.. Enjoy em.. Privately registered aircraft in Canada are actually quite easy to own.

[iflyforpie]

Private Air Operators (604) only applies to large (>12,566 lbs), or turbine and pressurized aircraft. It was regulated by the CBAA, but has now gone back to TC.

You can put a 150 or Saratoga under private registration and operate it under your company with no additional oversight than a normal private aircraft would have.

One thing you have to be careful of is making sure that your activities don't fall under 'hire or reward', like using the aircraft to haul clients for the purposes of conducting business (like the old Prohibition loop-hole: pay to see the pig, have a drink on the house).

[ArcticKat]

Ahh, many thanks for the response Gents. I searched the CARS under "Business Aviation" and came up with a bunch of stuff that didn't actually define the specific aircraft covered and I'd already recycled Kevin's article on the front page of this month's edition of COPA Flight. Being the noob that I am I'd prefer not to make assumptions.

The only other real problem is that I had considered using the plane to transport my staff to remote work places. If I do it for no charge, I'm fine, but if I get financial compensation for it, I'm likely in trouble. Currently, we're paid mileage for driving 3 hours to the work site, if I fly, I can't claim anything, if I understand the rules correctly.

I guess I can forget about getting a 421 some day.

[trey kule]

When you start to discuss business deductions, you might want to seek a more......ah....reliable source ....
You can make some allowable deductions, but I think you will find that personal vs. business use needs to be accurately handled..Better to stay out of trouble, then get out of it...and that applies by a factor of 10 with CRA (dont ask how I know this)..

If you set up a system properly, you can fly contactors etc. on your aircraft, as long as compensation is not paid.. It is something that the big corporate departments do all the time, but it has to be really well documented.

If you care just flying it personally, and claiming equivalent mileage, I suspect your tax advisor/accountant will not have a big problem with that..The problem usually arises when smart people get creative and start thinking outside the box with regard to regulations and tax considerations.

[ArcticKat]

No worries Kule, my books are audited annually by my accountant and she won't let me get away with bugger all. That's actully one thing that had worried me. She'd likely pro-rate my usage for personal use and only let me write off the miniscule portion that I use for business transportation.

[howard40]

If you use the plane privately you can charge your company nominal mileage like a car. Make sure it is reasonable. Folks get into trouble trying to put all the capital side through the business. If your business side is much smaller use than the private side charge the company side say a buck a kilometer.
check with your accountant.

[cdnpilot77]

We have the same situation. Our DHC-2 is registered to the business. It is used for a mix of business and pleasure and is documented as such. It is actually quite simple to work the tax end of things and deductions for mileage etc with a good accountant, we do have a couple of benefits of a having our own private airport though. Feel free to pm me if you want to discuss my situation and the similarities to yours.

[Hornblower]

Any use of an aircraft for “hire and reward” would make it a commercial operation. If that “hire and reward” is gained from transporting passengers or cargo, it becomes a commercial air transport service for which you would require an OC.

That being said it looks like you are going to use them yourself and not realize any “hire and reward” benefits, so you should be fine. There is a lot of confusion right now about 604 business ops, because the rules in 604 no longer apply as of April 1st. There has been published, a Ministerial order that specifies who needs a 604 cert, and it is: all “large aircraft” operators, all turbojet powered aircraft operators (not turbo props anymore), and anyone operating 3 or more aircraft in support of their business interests and have hired pilots to fly them (if you fly them all yourself it doesn’t apply).

Any business can register a private aircraft as long as they are incorporated under the laws of Canada or a province, and they are at least 50% Canadian owned … unless you are Canadian Helicopters Limited … because they are special … do’h

Whether the aircraft is owned by an individual or a corporation, is not a factor in it being commercially operated. “commercial” has a different and specific meaning when it comes to the CARs.

You may want to keep in mind that if you commit a violation with an aircraft that is owned by a corporation, your corporation is liable to fines that are 5 times higher than the fine you would receive as an individual … you may even receive two fines … one for you, and one for the aircraft owner (corporation). That’s always fun. TC likes to @#$! people over when they have a golden opportunity like that.

[ArcticKat]

Thanks folks. I have no intention or desire of using the plane for fare paying passengers, and if I am not the pilot, it'll be a friend who would simply pay the expenses to use the plane. From the sounds of things, the way I plan on using the aircraft should be well within the boundaries of the regs....until I get silly and buy a third plane then have to pay a pilot to transport my staff somewhere...like that'll ever happen.

CDNpilot77, I'll likely be in touch sometime closer to fall, I'll be in the market about then.

[Beefitarian]

That makes me wonder about something I was told about like a decade ago. I was talking about buying a plane and an instructor told me something along the lines of, "Buy a commercially registered one and keep it registered that way. The maintainence requirements are slightly higher but they will be better maintained and keep their value better."

Sometimes that's just not true because for some reason people price planes by year and type. I suspect it's because the people that have crap planes think. It's a 1974 warrior so it should be worth the same as all the other ones that have been well maintained.

So if you are just a private pilot and have a commercially registered C-150, or in this case his company owns it. What would be the benifits/down side to private vs. commercial registration?

[iflyforpie]

There are pros and cons to buying privately and commercially registered aircraft.

For example, you buy a commercially registered 150 and it has been flown regularly, has the more stringent maintenance requirements of the TC Maintenance Schedule Approval, and probably has had more updates and recent maintenance (ie, newer engine overhaul, newer mags, etc).

But it also probably has 15,000 or 20,000 hours, with five or ten landings for each of those hours by students. The interior is probably thrashed, the paint is worn, and the radios are the bare minimum.


A privately registered 150 might have been kept in a hangar so the paint is nice, the hours will be much lower, the interior much better, and it might even have some nice upgraded radios in it. But the older and infrequently run engine can quickly make it a basket case.

[Beefitarian]

It's funny. The second I saw "150" in your post I realised, that baby was a flight trainer. I would think that's potentially a big down side. However as you pointed out a well maintained worn airplane is more usefull than one that's sat in a hanger to go sour due to neglect.

[Hornblower]

I was talking about buying a plane and an instructor told me something along the lines of, "Buy a commercially registered one and keep it registered that way. The maintainence requirements are slightly higher but they will be better maintained and keep their value better."

Your instructor was a moron. I never saw a commercial flight school airplane that was as nice as a private one. The flight school ones are pretty well beat to shit for the most part. And you can't keep an aircraft on "commercial maintenance"; it has to be maintained to an approved maintenance schedule, and the only one approved for privates is CAR 625 app B. Of course you can do more, but that would always be at the discretion of the owner, and wouldn't alleviate the annual insp. reqs. ommercial flight schools generally never do more than is required by law ... like even wash the windscreen or vacuum the stinking carpet.

... show me a nice commercially operated Navajo ...

[Beefitarian]

Wow, you showed me.

ommercial flight schools generally never do more than is required by law ... like even wash the windscreen or vacuum the stinking carpet.

Where's that? I thought Morgan Air was bad enough. Their planes were kept fairly clean at least.

[Hornblower]

Dude, every flying school aircraft I've ever seen was either totally beat or well on its way there. They are for making money, and flight schools rarely ever make enough money to maintain or upgrade. There are a few notable exeptions like the Ontario colleges for example, but I have never seen a private flight school keep their aircrat well maintained, and for that matter neither have I seen flying club flight schools do well in that regard either ... just sayin'

I can only imagine the crap that Ravi is operating now.

[Hornblower]

double sorry

[Hornblower]

here's a fine example of a commercial aircraft that was operating last summer ... apparently legally...
http://www.csplane.com/7255.htm

I want to get on that maintenance program hahahahahahahahaha

[Hornblower]

another fine example of outstanding "commercial" maintenance ...
http://www.csplane.com/7173.htm

[iflyforpie]

another fine example of outstanding "commercial" maintenance ...
http://www.csplane.com/7173.htm

"Hey Billy-Bob! C'mere! It dun got one of them FANCY King radios in et. Yeehaw flip-flop!"

I dont think I've ever seen a 180 in commercial service that wasn't completely thrashed.

[Big Pistons Forever]

another fine example of outstanding "commercial" maintenance ...
http://www.csplane.com/7173.htm

"Hey Billy-Bob! C'mere! It dun got one of them FANCY King radios in et. Yeehaw flip-flop!"

I dont think I've ever seen a 180 in commercial service that wasn't completely thrashed.

It's not trashed, it is just cosmetically challenged

[tallfield]

There is at least one private flight school that maintains their planes to very high standards. Stratford Flight Services...two older C150's, a five year old C172 and a darn near brand new C172 glass panel G1000. Always clean and up to date...and any issue promptly taken care of...reasonably priced too! Surely they can't be the only outfit doing this right?

[Beefitarian]

Dude, every flying school aircraft I've ever seen was either totally beat or well on its way there. They are for making money, and flight schools rarely ever make enough money to maintain or upgrade. There are a few notable exeptions like the Ontario colleges for example, but I have never seen a private flight school keep their aircrat well maintained, and for that matter neither have I seen flying club flight schools do well in that regard either ... just sayin'

I can only imagine the crap that Ravi is operating now.

Sorry I'm retaliating but she wasn't a "Moron", at the time commercial planes in Canada needed to undergo 50 hour, 100 hour and 150 hour inspections while private ones only needed the 100 hour ones. If the plane was getting flown it would need twice as many inspections. Then you come along with your, "Dey aint gotta git more fixin." ok.

If a schools planes are beat and yes I realise that's probably typical, I hope you're saving $20+ per hour to try to keep them from falling from the sky while you rent them over a place like tallfield mentions.

[Posthumane]

Just to add a bit to the original topic, my friend ran into some issues with registering his truck to his company. The rules may be slightly different for aircraft compared to cars/trucks, but it's something to watch for.

If you own a vehicle and use it to travel for work, the company can reimburse you for the travel up to the gov't high mileage rate (which is currently about $0.51 / km). This applies to any vehicle you use, including aircraft. This isn't considered flying for hire as long as the requirement was simply to get yourself there by your own means, and flying wasn't necessary as part of your work. I believe this is a non-taxable reimbursement, but don't quote me on that. If your company needs to use a vehicle, you can lend your company your car and have it be a shareholder loan (assuming a corporation), for which you get paid back. The latter may not be an option with an aircraft due to private registration.

On the other hand if a company owns a vehicle and you (as an employee, director, etc.) have private use of that vehicle then that can be a taxable benefit. Think company car. This can turn out to be a double whammy where you've paid for the vehicle and then get taxed on it every year because your company is letting you use it.

Anyway, just something to keep in mind. Take this information with a grain of salt, as I haven't dealt with the issue myself yet.

[iflyforpie]

Sorry I'm retaliating but she wasn't a "Moron", at the time commercial planes in Canada needed to undergo 50 hour, 100 hour and 150 hour inspections while private ones only needed the 100 hour ones. If the plane was getting flown it would need twice as many inspections. Then you come along with your, "Dey aint gotta git more fixin." ok.

If a schools planes are beat and yes I realise that's probably typical, I hope you're saving $20+ per hour to try to keep them from falling from the sky while you rent them over a place like tallfield mentions.

Actually, most Commercial maintenance schedules for light aircraft only require 100 hour inspections. Ours do and every place I've worked was the same way with the exception of aircraft with engines on-condition.

Of course, I've never worked for a commercial operator that skimped on oil changes and the very few private aircraft that do more than 50 hours a year also get their oil changed at 50 or 25 hours as applicable.

What the difference is between the two is the nice to have stuff. They both have the need to have (unless the regs and manufacturer's regulations are not being followed, but then anything goes), but the private aircraft will most likely have the nice to have stuff.

I did a portion of my PPL on then brand-new Cessna 172SPs. They were nice, but a couple years of commercial/student flying already had them looking poor. The nose wheels shimmied as bad or worse than any old 172 (our 1976 172M has zero shimmy), the starter motors were burned out because students + fuel injection + hot days = no start, the windows were all scratched up from headsets and knee boards, the struts scuffed up from ladders and soles. Kind of like a 'new' company work truck at the end of a year.