Excuse the very basic question but whilst I did study this many years ago, I have not dealt with a property management company for many years and seem to have forgotten everything!
A SA client I already work for has recently been appointed as a director and shareholder of the property management company for his building, along with the 3 other residents. (It is an old house split into 4 residences). He has asked me to take over the accounts and CT600.
The company holds no assets but deals with insurance and maintenance of the building.
Last year's CT600 shows the small surplus (after losses b/f) being entirely relieved by management expenses under s75 ICTA88 in box 24. There is no figure in the Excess Management expenses box 136.
So, I look at the tax comp believing that there has to be a breakdown in there but there is no mention.
My questions are:
1. It seems rather co-incidental that the management charges available would exactly equal this year's surplus. Presumably there should be a reconciliation of excess mgmt expenses b/f, c/f? There is no info in the pack form previous accountant, but presumably I should be asking him further for this info? Would HMRC know?
2. Whilst I have a vague understanding that these management expenses would ordinarily result from the company no longer having investments (i believe it may have previously held the leasehold of the business but I am not sure as the company is 9 years old and the last 5yrs accounts certainly don't show investment assets), I really can't remember much more about them, the conditions of using them etc. I have tried good old google and looking in old text books but have not found any useful information. Does anyone know where I could get a quick refresher? Or be kind enough to enlighten me?