Tax Situaton regarding Professional Pilot Training

pocketac3s

Hi All,

I'm planning on becoming a professional pilot, as you can imagine this is a very expensive pursuit and could cost anywhere between 105k to 150k. As a young man I have no way of funding this myself and any loan I take out will have to be guaranteed by my parents or even took out by my parents for my intentions.

So I was wondering, if my parents took out a loan in the region of 150k to pay for this, is there any income tax write off?

Thanks for your help.

Newcarneeded

In a word, no.

There's no way to write off the interest against your/ or your parents, PAYE or other tax liabilities.

You could look into registering yourself as a private company and then have your FTO invoice you. Down the line if 'self employed' working for a flight school as an instructor, you may be able to recover your input VAT from your output VAT but I don't know if this has been done successfully before.

It's all very unfair. For an airline to pay for the training they would write off the full course of any training as a business expense. This would then reduce any taxable profits they have and thus save themselves 12.5% in tax on any profits they make. Or be available as a loss to be relieved against future taxable profit/ relieved on a value basis.

However now prospective candidates (or their parents) must find the best part of €100k, maybe as high as €140k if they pay for their own Type rating, which has to be earned from income taxed at 20% or 41%, so you need to earn approx €150k to pay for your training. Alternatively, borrow all the money and repay your €100k plus interest over 8-10 years.

The sums involved are huge. The difficulty in finding your first job after obtaining all your licences is probably even greater. PPrune.com is an invaluable resource as is flyinginirelandmagazine.com forum. Altho i presume you are aware of each of these.

pocketac3s

Thanks for clearing that up, I guess I was being more optimistic then anything else. But again; I am determined to do it so I'll march on regardless. In terms of setting up a private entity to fund it as a business expense, would it be possible for my fathers business to do it?

Thanks for all the help, God knows I need it.

Musha

I can understand your situ pocketac3s, My cousin went through this a few years ago, and is now happily working for BA for the last 3 years, his parents helped him out with fees and he worked during term breaks etc. Good Luck I know it will be worth it as the earnings are good when you qualify and you will be able to payback the money over time.:D

pocketac3s

Musha wrote: »

I can understand your situ pocketac3s, My cousin went through this a few years ago, and is now happily working for BA for the last 3 years, his parents helped him out with fees and he worked during term breaks etc. Good Luck I know it will be worth it as the earnings are good when you qualify and you will be able to payback the money over time.:D

Thanks Musha, It'll be hard going but I'll get there.