A family office entered into a purchase agreement with an aircraft manufacturer for the purchase of a Bombardier Challenger 350 (the "Aircraft") which was assigned to an Irish SPV (the "SPV") as per the structuring and financing arrangements.
An Isle of Man Company (the "Company") was formed and entered into an Aircraft Operating Lease with the SPV for an agreed monthly lease rate. In this scenario, the Company does not take beneficial ownership of the aircraft, but has full use of it as if it did. The Company is responsible for making all lease, insurance, operational and maintenance related payments for the term of the lease. The Aircraft Operating Lease is in place for a period of five years after which the Aircraft can be delivered back to the lessor or the lease can be extended. Such Lease obligations are with recourse to the Company, with the ultimate beneficial owner acting as guarantor.
The Company entered into a Wet Lease Agreement to lease the Aircraft to an entity under the ownership of the family office, receiving a rental income. The Aircraft is largely used for business purposes with a small amount of personal use.
The Aircraft was imported to the Isle of Man and registered in the name of the Company on the Isle of Man Aircraft Register and IQE worked with the Isle of Man Aircraft Registry to meet aircraft registration requirements.
The Aircraft is managed by a third party aircraft management company during the term of the lease with the exception that the Aircraft and major components are covered by third party maintenance plans. The lessor ("the SPV") periodically performs inspections of the Aircraft and its records and reviews the aircraft management company's performance to ensure that the Aircraft is being appropriately operated and maintained.
The Isle of Man has a unique position, as it forms part of the common area for UK VAT and Customs purposes without being part of the EU, which makes it an attractive jurisdiction for VAT importation. The Company entered into an agreement with an aircraft VAT specialist to advise on the registration of the Company for VAT on the Isle of Man in respect of the importation of the Aircraft into the EU via the Isle of Man. IQE facilitated the VAT registration and, thereafter, co-ordinated the touch down of the Aircraft at the Island's Airport to complete importation with the Company able to claim repayment of VAT on importation and utilise a VAT deferment account to avoid a cash flow 'cost'.
A dedicated client relationship manager is appointed to the client and IQE provide ongoing company management, company administration, including liaison with the leasing company and arrangement of payments under the terms of the Wet Lease Agreement, VAT administration, including completion and submission of VAT returns, bookkeeping and accounting services to the Company
As well as the formation of an Isle of Man company, IQE provides professionally qualified directors, registered office and registered agent.
We have the expertise to assist with multi-jurisdictional fiduciary services for international structures
On a recent transaction we worked closely with IQE to set up and run a corporate structure to facilitate a new residential development in London. We found the IQE team responsive and proactive. It was clear that their property experience added value and understanding of the clients’ requirements on the project. Christine Jackson, Partner, Real Estate Group, Lawrence Graham LLP
In response to a growing aspiration for individuals and families to invest and work in an ethical manner, IQE and MannBenham have collaborated to establish a structure which can be used for a range of ethical purposes including Shariah compliance, ‘green’ social impact investment and philanthropy. This is a universally recognised company established for ethical purposes to meet individual principles (none of which are mutually exclusive) and which can be employed where Foundations or Trusts are not accepted to achieve a similar outcome.Read more.