The Self-Assessment Tax Return Deadline is in
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Following approaches by a number of landlords worried about the implications of HMRC’s Spotlight 63, we understand that HMRC have now written to buy-to-let property owners regarding a tax avoidance scheme promoted by Less Tax for Landlords and others requiring them to respond by no later than the end of January 2024.
In negotiation with HMRC’s lead team heading this tax spotlight we have been able to ascertain HMRC’s scope for enquiries and areas of concern. There have been so many iterations of the Hybrid structure that each case is likely to be looked at on its own merits.
Operated by “Less Tax 4 Landlords Ltd,” and others, this scheme involves landlords creating a limited company to divert the income from their limited liability partnership (LLP). The aim is for the LLP to reallocate all or most of the profits to the corporate member, effectively minimising their tax liabilities by paying tax at 19% instead of 40% or 45%.
HMRC are very clear – this tax avoidance scheme is not a legitimate means of reducing tax obligations, and those involved should take immediate action to rectify their tax affairs.
HMRC’s view
HMRC has pointed out that the scheme violates several tax rules:
Have you received a letter from HMRC?
If you were involved in participating in this type of scheme but have not yet received a letter from HMRC, or your promotor has gone quiet and not responded, then time is running out and you need to take action immediately.
Get independent professional tax advice from a qualified Chartered Tax Adviser specialising in UK Property tax. UK Landlord Tax are here to assist you
Contact us today via 01902 711370 or email enquiries@uklandlordtax.co.uk for an initial consultation.
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Wolverhampton
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