Many property investors need help with managing their business, and involving their children has a number of potential benefits, both financially and otherwise.
This article looks at how investors can get a tax deduction for employing their children, or child in their property business, and how to ensure that this is done lawfully.
What are the benefits of ‘employing’ my child(ren) in my property business?
Tax- relief = lower tax bills
Payments made to children to help with managing a property business are tax deductible for the business, and so a lower tax bill can be achieved – clearly a good result!
Children receive an income tax Personal Allowance (2017 tax year: £11,000 per person), and income up to this limit is tax-free. Therefore, paying children a wage can result in a ‘one-sided’ tax result i.e. a tax deductible expense for the business, but NO tax bill arising on the income by the wage-earner.