Can I charge fees for managing my son’s properties?
I used to own 8 rental properties in central London, which I have been managing myself for the last 35 years, even though I live abroad.
All properties, but two, have been gifted to my 25 year old son, who is studying full time in the UK. For the first time in the 2018/19 Tax year my son will be paying taxes on about 180K yearly gross rental income as s 24 starts to bite.
I was wondering if I could charge him, say 10-12% management fees/or a set wage for the next five years in order to reduce his tax burden until he assumes full management of his own properties.
I thought of this ‘services’ ( or wage ) option as it is completely true and valid and a simple way of reducing his tax burden without entering into a company formation or partnership. I will be paying increased tax on my UK rental income( on the remaining 2 properties) once this ‘services/ wage” amount is added, but it would not be as high as his.
We already have a joint business account in which all rents and expenses are going through and therefore, there is no problem for me to continue managing his properties as I have always done in the past when they were mine.
I would welcome any thoughts on this.
Thalia
13 comments on this article
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Member Since September 2018 - Comments: 3720 - Articles: 5
8:40 AM, 11th April 2022, About 4 years ago
Reply to the comment left by Gary Nock at 24/07/2018 – 08:16
‘However be aware that if you let the properties for him and fall into the category of a Letting Agent then you will need to be legally compliant to do that. This includes membership of a redress scheme, and from next April client money protection which also means professional indemnity insurance’
Does this apply even if that person doesn’t charge the owner for managing them/looking after the properties on their behalf?
Member Since September 2024 - Comments: 95
4:31 PM, 13th June 2025, About 1 year ago
Dear Tenant,
As you know, in an attempt to help you out I have allowed you to stay in my property for several years always at several hundred pounds per month below average rents.
I’m afraid I have to inform you that despite my best efforts I don’t have the funds to pay for the upgrades to the property the Government is now requiring and I am unable to borrow more from my lender. Therefore, it is with a heavy heart I have to ask you to leave within 2 months. The property is clearly no longer suitable and I don’t want to break the law or attract fines for renting an unsuitable property. I realise you have been with me for over 15 years, you have raised your family here and are happy but please don’t blame me – you can thank the Government
I am no longer allowed to rent and you will no longer be able to reside in the property.
I suggest you show this letter to the LA and ask them to re-house you.
Rgds
Landlord
Member Since October 2020 - Comments: 1354
10:01 AM, 14th June 2025, About 1 year ago
This proposal would make you your son’s agent. You would need to register with one of the redress schemes, open a protected client account if you’re collecting the rent, carry out the new sanctions checks and probably get new insurance.