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Sincere apologies to all involved.The thread about the Daily Mail article featuring Mark Alexander saying there was a way for landlords not to pay tax has accidentally been deleted.There were duplicated comments by the same person, which we went to delete, but unfortunately pressed the wrong button and the whole thread has been deleted. This is a great shame as it was evolving into a very interesting discussion.Please accept our sincere apologies.For those who want to continue the discussion, it was based on this article:Full/source article
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
What are the odds of the government taking action to close this loophole - if it exists?
its not a loophole. its been available for many years. So few of the 2m+ landlords are elegible and the ones that are the ones they want to see professionalise and become corporatised prs providers.
Check me out at: http://www.LordLucan.com
I will rephrase, what is the probability that the government will take action to stop individual landlords incorporating and using a bare trust to reduce the tax payable on their buy to let income.
No one is doubting that landlords incorporating is wrong. In fact, Stephen Johhson, M.D. of Shawbrook Bank made it clear in the below video that it was probably the only legitimate strategy to use:What is less clear is when structures become more complicated, like the one advocated in the Daily Mail article.
I am adding comments from the HMO Group on Facebook as many of the same people commented here to the same effect.
If you want to incorporate, pay for professional advice from people with a track record for incorporating buy to let portfolios. Your advisers will obtain advance clearance for your specific case. Once you have the clearance number from the HMRC, you then proceed with the incorporation.
Most people commentating on the internet have no experience of successful landlord incorporations and therefore only see obstacles for why it can't be done.
Not all landlords will be able to incoprorate free of cgt and sdlt. You can't do this DIY from researching forums. You need proper professional advice before taking a very important business decision.
It makes me chuckle when people say it can't be done when I have seen correspondence from HMRC giving advance clearance for such incorporations.
In my book, paid professional advice and an advance clearance number from the HMRC is infinitely more valuable than posts on internet forums from neg-head amateurs with no experience of successful buy-to-let portfolio incorporations.
Not sure who you are calling neg head amateurs? Mark Alexander's article sparked the debate and he advocates this structure on a regular basis. No one is saying it can't be done either. They are just questioning if its legal and will stand up to HMRC scrutiny.I also questioned the timing of the article, bearing in mind that it is a very sensitive time for landlords lobbying against S. 24. I believe we want to present a responsible image, not a bunch of greedy people trying to avoid paying any tax. Just look at the comments on the article to see what I mean.Debate helps tease out the details and deliver understanding. However, everyone should receive bespoke professional tax advice from an independent party (not scheme promoter) and not enter into any schemes without first checking with HMRC. I certainly agree with you there.
The scheme that prompted this discussion is far removed from "incorporation" that, in itself is indeed well tried, tested and proven to be possible with no net liability for cgt or sdlt arising if certain conditions are met.
Also, whilst pre approval by HMRC is the best you can get, don't think that means it isn't going to possibly try to change its mind later!
for example, points 80, 81, 82 in this judgment from the companies court
This case was to do with correspondence and NOT advance clearance for which an advance clearance number is issued. The HMRC has not to date changed their mind on any buy-to-let incorporation advance clearance they have given, (unless of course any information provided to obtain the advance clearance was later found to be untrue)