Tax Scheme Alert: Landlords Beware of Misleading Advice

Inadequate Tax Advice

A tax scheme uncovered in an investigation by Dan Neidle of Tax Policy Associates reveals a notorious ‘Accountants and Tax Advisors’ firm that has misled clients. This scheme involves transferring existing properties to a Limited Company, promising minimal upfront tax costs. However, it often doubles the tax liability for landlords who’ve been misguided into adopting this advice.

Avoid Aggressive Tax Schemes

We’ve consistently cautioned against aggressive tax avoidance schemes like these, emphasizing that they’re easily detected by HMRC’s anti-avoidance laws. Unfortunately, some landlords have already fallen into this trap, and they now face substantial tax bills as a result.

Potential Consequences

HMRC is likely to scrutinize both the tax scheme and the advice given by this firm. Despite being incorrect and offered by non-tax-qualified individuals, landlords will bear the brunt of any tax, penalties, and interest during an HMRC Enquiry.

Learn More

To protect landlords from such schemes and provide details about this specific scheme, we’ve provided links to third-party sources:

– [AccountingWeb Article]

– [Tax Policy Associates Report]

Active Warning

Exercise Caution with Tax Scheme Advice

We consistently caution clients to exercise vigilance when considering advice from this firm and others like it. Their aggressive approach to tax scheme advice often exposes clients to substantial financial losses upon HMRC investigation.

Seek Expert Guidance

If you have engaged in this scheme, reach out to us for expert guidance on the necessary steps to take before an HMRC Enquiry initiates.

Questionable Tax Scheme Overview

In summary, this tax scheme likely violates HMRC’s anti-avoidance laws, raising significant concerns:

Incorporation Relief Risk: HMRC may not accept Incorporation Relief, potentially leading to Capital Gains Tax liabilities.

Trust-Related Mortgage Risks: Inadvertently, the use of the Trust may implicate clients in mortgage fraud.

Stamp Duty Land Tax Implications: Despite a ‘Partnership’ arrangement, Stamp Duty Land Tax might still apply, and it is doubtful that this arrangement will escape HMRC’s scrutiny.

Costly Property Transfer: The substantial Capital Gains Tax and Stamp Duty Land Tax costs make property transfers to a Limited Company unattractive for most landlords.

Unreported Scheme Risks

This scheme should have been reported to HMRC as a tax scheme, but it appears that it hasn’t. This oversight could result in significant fines for the promoting firm if HMRC decides to pursue this matter.

How We Can Assist

If you’ve fallen victim to this tax scheme, reach out to us for guidance on rectifying your situation before HMRC launches an Enquiry.

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