Property management company - USERNAME: jay - 09/10/2018

Tax Question:

What might the tax position be on owning properties privately, but managing them through a company structure that the private owners are directors of?

The private (-highly experienced successful landlords) owners - a husband and wife team- who wish to semi-retire - would like to have greater protection from new laws that easily criminalise landlords for not filling in the right forms, etc, etc. on top of selective licensing laws which prevent owners even leaving the country for too long. The limited company would employ or contract staff to do the running and form filling, right to rent filings, etc. The owners would lease the properties on a short term basis (1-3 years) to the company for a flat fee, of say 25% of rent. The company would collect rent, pay the annual leasing fee, and do all repairs and summersaulting that modern landlord laws ever increasingly require, through extra staffing.

Answer:

Usually in a property management structure the company would charge the landlord for the services it provides (at a market rate) and the landlord would simply claim that as a deduction as an expense of the letting. Any excess cash in the company could then be extracted as dividends. Is this what you had in mind?