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  • Tax

    Management company set up?

    I manage all of my properties myself.

    RITA have recommended that I set up a Management Company so that I can (legitimately) offset against my tax.

    How easy, quickly and cheaply can this be done and whom do I use to do this?

    thank you.

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    Really depends on your rental income/profit and how much your accounting fees is. Maximum you could charge for management is between 10 to 15% of rental income. Not to mention about the extra paperwork.

    Do the maths...

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    Just catching up on a few topics today & noticed your post.

    This is an option I've previously considered. I also manage my own properties and had looked into an option of charging 15% to myself via a Ltd Company which would manage all aspects of the tenancy side of the personally held properties.

    I  had advice via  RITA  earlier this year with regard to general Sec 24 planning. I was advised that whilst this option was possible, so was the likelihood that HMRC could view it purely as an arrangement to avoid tax and having no legitimate business benefit. In the end I decided not to purse the option as it would have been a fairly short term arrangement until enough time had passed to deleverage and reduce in number my existing properties; when the benefits would then be outweighed by the costs and additional administration involved with a Ltd Management Company     

    I am concerned however that we received differing advice from the same accountancy firm ? If they themselves have a subjective view on this sort of arrangement, then it doesn't bode too well for it's legitimacy to be tested by a less benign organisation !!!             

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    I have gone down this route the Company owns its own property and it manages  my personal owned property and it manages all my repairs and charges a fee for doing so

    The director of the Company is my wife

    all my personal owned property is only in my name

    My wife also manages a coupe of other BTL for her customers



     

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    Learn Change and Adapt ?????


    DL

    Can I ask how much the limited company charges your personal properties for this service

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    15% and one half rent for a new tenancy

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    Learn Change and Adapt ?????

    £12 to register a company.

    https://www.gov.uk/limited-company-forma...ur-company

    I pay £750 per year for the end of year accounts.


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    I pay £13 pa to maintain the company registration and £200 pa for accounts (to the same company that handles my personnal accounts)/

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    Just finished the second year accounts off today and I am glad I bit the bullet Now

    Its working well I have no complaints


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    Learn Change and Adapt ?????

    Thanks for all replies.

    RITA have confirmed that it would be legitimate if it was set up properly.

    Do I need a solicitor to draw anything up or just set it up online myself via which I’m perfectly happy to do? Didn’t know if it’s as simple as this?

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