Rents received in the P&L ??
A property management limited company derives rents from commercial clients in two scenario's :
1) lease agreement between company and clients and between company and landlord
2) lease agreement between landlord and clients
In (2) above the company is simply collecting the rents on behalf of the landlord and paying this straight across. Sometimes a surplus is retained a surplus on rents collected but essentially the company charges the clients an admin/mgt fee for this facility.
In (1) above the company charges the clients rent receivable in excess rents payable to the landlord under there own arrangement/lease agreement. An admin/mgt fee may or may not be charged in addition but fundamentally the profit is derived from the net surplus rents received.
The question therefore is how should this be displayed in the P&L ?? I am assuming that in (2) the income is not reported in the P&L as it is technically not trading income of the company, however in the event of a net surplus can this be combined with the rents received in (1) or are they required to be reported separately in the P&L ??
Note that I am NOT netting-off the rents receivable and payable derived from (1), as this I consider to be trading income and cost of sales of the company.
A little bit complex but hopefully I have made myself clear.
Any advise greatly appreciated.
- Entrepreneurs' relief for trustees - receipt of rent 95 1
- Notes to statutory accounts 30 2
- Client died family to pay redundancy 83 1
- If an invoice is sent and paid does a contract exist 390 13
- Builder using cash labour 291 3
- Easy way to not pay tax 699 18
- Holding companies 28 1
- Accomodation charge for Publican 106 2
- VAT & Landlords 40 1
- VAT Registration 327 16
- Singaporean Tax Adviser 41 1
- Valuation of PET on death 205 6
- Auto enrolment 856 10
- Unusual Self Employment Expense Claims? 250 4
- Payment for goods received on last day of quarter but refunded the next - what options are open here? 405 17
- Vat on second hand goods 167 2
- Soil Survey Required Mortgage 128 4
- Incorporation - any tax advantage? 633 17
- another ir35!!!! 846 3
- Entrepreneur's relief and LLPs 165 3
- Skandia using wrong address 1,511
- Nil Rate Band Trust - index linked debt by way of charge over property 836
- International interest certificate 454
- NOVA 310
- Bonus Bonds 194
- Can Limited Company Buy Share of Rental Property? 190
- Subby expenses subject to tax & NI? 187
- Management expenses for investment company 184
- DOUBLE TAXATION RELIEF BETWEEN A PRIVATE LTD COMPANY AND GREECE (the private Ltd has no employees and its main activity is 172
- Have we escaped Gift with Reservation of Benfit & Pre-owned asset charges? - Gift after benefit 164