Readers' forum : Tangled transactions

I have a new client Mr A. I have also been appointed to act for his property businesses but am concerned about various transactions between these.

In the first instance Mr A is a director of a company that lets out property. The annual profit is about £100 000. Mr A is also a partner in partnership B which carries on the same business owning and letting out properties. The other partners are his wife and in-laws.

This all seems straightforward but I have now found that the partnership bills the limited company £40 000 a year for administration services. There is no other income nor significant expenses and the profit is divided between Mrs A and her mother giving them £20 000 each.

Mr A is also a partner in partnership C which buys and sells property. Here the other...