HMRC’s Opinion On Hybrid LLP’s – Why They Don’t Work

A heavily promoted tax scheme using an LLP with a corporate shareholder has literally come under the spotlight by HMRC.

The scheme was promoted to landlords to avoid paying tax on their property income and reduce Capital Gains Tax and Inheritance Tax. HMRC has now published the following on 4th October 2023:-

Property business arrangements involving hybrid partnerships (Spotlight 63) – GOV.UK (www.gov.uk)

This is bad news for any landlord that was sold this tax scheme. Through the hundreds of landlords that have approached us ever since the introduction of Section 24, we have strongly advised against such schemes as it was clear to us that they simply did not work.

We have been made aware that a notorious promoter, who boasted this was a way to achieve less tax for landlords, has taken down their website and removed any reference to their previous heavy promotion of this as a tax scheme. Ironically, they have achieved the exact opposite, i.e. More Tax For Landlords.

The fallout from this is that innocent landlords genuinely looking for a way to reduce their tax exposure and the effects of section 24 will now face the unenviable task of undoing all of this. I would urge anyone who has been caught up in this to get in touch with suitably qualified tax advisers and avoid going to other notorious firms.

If you have any further queries on this subject please reach out to us at 01902 711370 or email enquiries@uklandlordtax.co.uk if you have any questions or require our expert assistance.

Thandi Nicholls Ltd
Creative Industries Centre
Glaisher Drive
Wolverhampton
West Midlands
WV10 9TG