My colleague Gabriel González, director of Sovereign’s marine division RegisterAYacht, introduced me to Mr. Smith at the Gibraltar Maritime Week conference. Although based in Hong Kong, Mr Smith had expressed an interest in acquiring a yacht, primarily for use in the Mediterranean, but had been struggling to find an ownership and operational structure that would make it a financially viable proposition.

Gabriel was assisting Mr Smith to find a model that would serve minimise his costs and maximise his potential usage. As part of this conversation, it became clear Mr. Smith was also a frustrated flyer. Based in Asia but with considerable business interests in the Middle East and Europe, Mr Smith generally has to fly to work. In addition to scheduled flights, Mr Smith has chartered aircraft at considerable expense when the airlines could not accommodate his itinerary. Although he has looked at other forms of private flying (such as fractional ownership), he has become convinced that having his own aircraft may be the best solution.

This is where RegisterAnAircraft (RANA) was brought in. To start with I needed to ask Mr Smith some basic questions. This was essential, I explained, in order to narrow and focus his options from the outset. His annual “time flown” was certainly above the industry benchmark that is used to determine whether private flying is an economically workable choice. He also made it clear that he did not wish to charter out the aircraft. He wanted it to be available for his use whenever he chose – either for himself and his family or to travel with business colleagues.

Finally he confirmed that he wanted the aircraft to be based in the Middle East – preferably Dubai – and that he would be looking at a design with a comfortable cabin for up to eight seats and a range of up to 3,500km. This would allow him to use the aircraft for his frequent trips to Europe, with a stop in Cyprus or Malta.

Having gathered this information, I had to emphasise to Mr Smith that a poor decision at the start – in respect of either the ownership structure or choice of registry – could prove expensive and time consuming to put right. Gabriel had explained this in relation to the yacht and the same is absolutely true for an aircraft. I then agreed to draw up a clear plan that would enable Mr Smith to have confidence that he was making the right decision and that he would be supported by RANA team and the wider Sovereign group at every stage of the process.

Before he left Gibraltar, Mr. Smith received my detailed report. My recommendations covered each aspect of the proposed transaction in turn. At the outset I reminded him (not that a reminder was necessary) that he would need to include his own lawyers and indeed tax advisors at every stage.

The technical part of the report covered a detailed look at aircraft in the light business jet category – the range of aircraft ticking boxes on his wish list. I provided performance and cost comparative analysis for each model – from the Brazilian-built Embraer Phenom 300, to several Cessna CitationJet CJ marques and through to the groundbreaking Pilatus PC-24 currently under development in Switzerland. As a serial charter customer, Mr Smith already has extensive experience of aircraft in this category and had a clear idea of what he liked and felt comfortable with.

In our discussions of the report we covered the question of “new” or “pre-owned”. Mr Smith was very clear that his preference was for a new build aircraft. He explained in quite colourful language that he had never bought a second-hand car and was not prepared to go down that route with an aircraft. I confirmed that RANA has links with manufacturers and brokers and that we could assist with identifying a suitable airframe/delivery position.

Mr Smith had already confirmed that he was looking to finance this investment and I made it clear that RANA had links to financial institutions and investors that operate in this sector. The fact that he’s looking at a new aircraft makes this potentially more attractive and straightforward for lenders. Once again I emphasised that the choice of ownership structure and registration jurisdiction would play a significant part in their risk assessment.

My report made a strong case for both registering the aircraft in the Isle of Man, the world’s fastest growing corporate aircraft registry, and holding it through an Isle of Man company. The Isle of Man register offers neutral registration marks, confidentiality, personal service and cost benefits, which tie in well with the island’s favourable corporate tax regime. The registry also puts no geographical limitation on an aircraft’s base, while its high standards of technical and operational oversight make it attractive to banks and financial institutions that are keen to ensure the security of their asset.

I suggested that, because the aircraft would be based outside the EU, Mr Smith should look at using the temporary/importation regulations to ensure exemption from VAT. However I also advised that he should seek expert VAT advice because, in my experience, different EU member states interpret the legislation differently.

The final part of my report covered the other areas with which we could assist – from recommending operators in the Middle East to manage and crew the aircraft, to providing competitive insurance for the airframe, engines and, of course, passengers through our in-house insurance broker Sovereign Insurance Services (SIS).

It is a hackneyed phrase but I see my role as providing ‘added value’ to our aviation clients. Mr. Smith left Gibraltar clutching my report and with the confident air of someone who has moved closer to finding a solution to a personal and professional problem. I share his confidence that we will soon be flying high!