Landlord SA tax return - management fee??

Jeremy535897

dctrgre said:

Voyager2002 said:

[Deleted User] said:

He takes 12.5% off his earnings and pays it to himself? 

If that is what he is doing he is understating his income for each and every year that he has done this. He has, in addition to paying less tax than he should have, filed incorrect returns. 

If he paid a bona fide agency, or alternative, that is fine. 

Think about it logically. He is claiming ‘his time’ as a management fee. Is he going to declare this additional  income? Doesn’t make sense. 

He might be reducing his rental income and increasing his income from self-employment, in the hope of increasing the amount he is allowed to pay into his SIPP.

Or calling it self-employment income and claiming trading allowance. Which would bring the word ‘evasion’ to mind.

Technically more like avoidance, but at the edge. Evasion would be just not declaring the rent.

dctrgre

Jeremy535897 said:

dctrgre said:

Voyager2002 said:

[Deleted User] said:

He takes 12.5% off his earnings and pays it to himself? 

If that is what he is doing he is understating his income for each and every year that he has done this. He has, in addition to paying less tax than he should have, filed incorrect returns. 

If he paid a bona fide agency, or alternative, that is fine. 

Think about it logically. He is claiming ‘his time’ as a management fee. Is he going to declare this additional  income? Doesn’t make sense. 

He might be reducing his rental income and increasing his income from self-employment, in the hope of increasing the amount he is allowed to pay into his SIPP.

Or calling it self-employment income and claiming trading allowance. Which would bring the word ‘evasion’ to mind.

Technically more like avoidance, but at the edge. Evasion would be just not declaring the rent.

I mean claiming his ‘fee’ as a rental expense, and including the same amount as s/e income which gets reduced by the trading allowance.

Anyway, regardless of the method it doesn’t sound correct.

Jeremy535897

dctrgre said:

Jeremy535897 said:

dctrgre said:

Voyager2002 said:

[Deleted User] said:

He takes 12.5% off his earnings and pays it to himself? 

If that is what he is doing he is understating his income for each and every year that he has done this. He has, in addition to paying less tax than he should have, filed incorrect returns. 

If he paid a bona fide agency, or alternative, that is fine. 

Think about it logically. He is claiming ‘his time’ as a management fee. Is he going to declare this additional  income? Doesn’t make sense. 

He might be reducing his rental income and increasing his income from self-employment, in the hope of increasing the amount he is allowed to pay into his SIPP.

Or calling it self-employment income and claiming trading allowance. Which would bring the word ‘evasion’ to mind.

Technically more like avoidance, but at the edge. Evasion would be just not declaring the rent.

I mean claiming his ‘fee’ as a rental expense, and including the same amount as s/e income which gets reduced by the trading allowance.

Anyway, regardless of the method it doesn’t sound correct.

It isn't correct. I explained why earlier. You can't hire yourself. You could argue that it is just a mistake, based on an incorrect understanding of the law, but it is clearly an arrangement designed to avoid tax, so at best it is tax avoidance. Evasion is more about lying, or concealing income without any justification.