Arthur Weller replies:
It is certainly possible to set up a management company to manage personally owned property, and charge the individual landlord a management fee. This fee can be any amount. However, HMRC will not accept a fee in excess of the normal, commercial rate. This is probably in the region of 10–15%. So the company can charge the individual whatever amount is agreed between the parties, but only 10–15% will be allowed to reduce the individual’s taxable income. Furthermore, HMRC would probably also tax the company’s profits in full.
This question was first printed in Tax Insider in April 2017.