We have 10 rental properties. We self manage all the properties. I work full time but my wife does not work. She is 50% partner of the properties. We manage, maintain and doing minor repairs when required.
My question is…………………..
Can we charge for the services?
If my wife register as a handy person and gets ABN number, can she charge to investment property? (She is co-owner)
She will be paying tax and file return for the income.
Please help.
That's a really good question – I'm looking forward to seeing the answer.
Have you put it to your accountant?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I' pretty sure you can't pay yourself for working on your own property (not legally anyway).
Same as I can't pay myself for managing my properties. I can pay someone else though (friend etc).
If she wasn't an owner- different story.
If I set up a company, Can I pay to company?
and wife can work for company.
I know there are tax implications but is this only the option?
Thanks
As Jamie has mentioned this is an area where you should get some professional advice.
With 10 properties you are starting to build a portfolio so would have thought you would have your Accountant on speed dial.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Guys
…………….
Speak to your accountant. You cannot contract with yourself, but you may be able to do it indirectly through a company. However this raises other issues -licensing, insurance, tax etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
As Terry points out, you will have several issues to address. Licensing – you may need a trades licence but maybe not if you are offering handyman services. If you have a separate entity to handle maintenance,will the ATO see this as sham contracting as you will be gaining 100% of your income from one entity?
My understanding of sham contracting was when a company hire say a carpenter as a subcontractor (he has his own listed Abn and licences) but When actually that carpenter is doing all the work for that particular company. Ie he is actually a employee. In this case the owner would be hiring their own company to do the work.
I would question the motivation behind why you would want to.
Is it to create more deductions for the rental properties, whilst also shifting the income into your wife's name
who currently doesn't work.
If you hire someone to take care of it, then you can definitely charge them but here it is you who is working. This is an issue which only an expert can answer.
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