Property management

by **johnjane** on Sun Nov 23, 2003 5:24 am

Previous advice seems to suggest owning a buy-to-let property personnally, but running it through a management company.

Basically how does this work?

by **Ian McTernan CTA** on Sun Nov 23, 2003 9:09 am

On just one property, this is not cost effective as the costs of running the limited company outweigh the benefits.

This device is useful where a number of properties are involved, as the management company charges a fee to you for running the properties and the limited company can claim a number of expenses that you can not as an individual, notably travelling expenses, etc. The limited company then has the advantage of a lower tax rate than the individual.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com

by **Huw Williams** on Mon Nov 24, 2003 12:43 am

You say that a company can claim expenses that an individual can not and I wondered why. I thought that rental income was now called a "schedule A business" so that all normal business expenses were deductible.

Huw Williams

by **Ian McTernan CTA** on Mon Nov 24, 2003 8:35 am

Huw,

It's to do with the place of business rules- if the limited company is registered at your house and the property is 200 miles away, the company can claim for the costs of travel to the property without much problem. As an individual, you will have trouble claiming travel from your home to the property as the 'place of business' is the property, not your home address.

That's my understanding anyway, but email me back at ian@imcternan.com if you wish to discuss further, and we can post up a topic here when we are agreed on the treatment for the benefit of other users.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com