A property company holds three properties. It is owned by the sole director.
The director pays himself a salary for collecting rents, general admin like organising finance, organising repairs etc etc.
Is the salary deductible from the Shedule A income for the company or is it a management charge?
Replies (5)
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Yes it should be an allowable expense, provided that the amount paid reasonably corresponds with the arm's length price for the services he provides. It's allowable because the salary is a management expense.
Don't understand the distinction you are trying to make, but that is probably my problem. I'll put it another way. It will be allowable as one of the management expenses that property companies are able to deduct from their rental income for tax purposes.