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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My borther and I are directors of a limited company,

Customer Question

Hello,
My borther and I are directors of a limited company, which deals with property management.
We also have several rental properties, which the company manages and the company charges a small management fee (1%) to cover the out of pocket expenses that the company incurs.
Is this the correct approach?
Also is it correct that we are clients of the company or is it not possible to be clients of the company as we are both directors?
Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.
It is in order to charge management fee to cover out of pocket expenses incurred by the company.
As far as the company dealing with your properties is concerned, you should disclose directors' interest within the notes to the accounts. You can be clients of the company as the company is a separate legal entity.
I hope this is helpful and answers your question.
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