Property investment company (company A) holds five unencumbered properties via DLA, all funds lent from husband & wife who hold one share each.
One of the properties within the ltd has subsidence & has obtained planning permission for a large c 150k building works. Husband decides that he would like to start a property maintenance & buildings company (company B) to manage the properties day to day & also do the building works for company A.
Company B (1 share owned by husband), has a contract with company A to complete the works at an agreed (+VAT) price.
Company B buys the materials & contracts builders to complete the works for company A. Company B registers for VAT to obtain VAT back on materials. The LTD also manages the properties for company A.
Questions:
1/ does it matter if company B is owned just by the husband? Can his wife own that too?
2/ What profit % margin should company B charge on the building works?
3/ Does company B have to recieve the rent then pay it to company A for management or can Company A just pay Company B a percentage eg 15% directly?
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