How does Buy to Let END!

[spygirl]

On 21/09/2024 at 09:44, One percent said:

Bloke rents out flat, cuts corners by not bothering with landlord insurance and then screams, ‘why won’t someone reimburse me’ when it all goes pete. Yet another example of foreigners making it a low trust society. Anyhow lots of details to pick the bones out of 

https://www.dailymail.co.uk/news/article-13826907/My-tenant-hell-cost-20k-Man-furious-fraudster-rented-home-Airbnb-saw-CCTV-left-stunned.html

Brown man rents to black man....

[spygirl]

Hard working migrants.

Doing the jobs brits won't.

 

[HousePriceMania]

 

[spygirl]

Landlords face six-figure bills in tax avoidance row

HMRC could hit buy-to-let owners with capital gains tax and stamp duty

 

Charlotte GiffordSenior Money Reporter

26 September 2024 11:00am

Have you used one of Property118’s schemes? Please email: [email protected].

Hundreds of landlords could be hit with six-figure bills after using a tax avoidance scheme promoted by a popular property forum.

Property118 sold plans for up to tens of thousands of pounds promising to help buy-to-let owners swerve duties such as capital gains tax and stamp duty. Experts estimate as many as 1,000 landlords used the service.

On September 19, two of its plans were named tax avoidance schemes by HM Revenue and Customs (HMRC), with some users already being slapped with backdated bills from the taxman. 

Accountancy firms told The Telegraph they are now fielding enquiries from panicked property investors in light of the ruling.

Property118 was set up by Mark Alexander, who claims to have helped “thousands of landlords build highly lucrative portfolios” on his LinkedIn profile.

The company – which denies any wrongdoing – drew up its tax avoidance schemes alongside a law firm called Cotswold Barristers, whose registered offices sit in Cotswold Airport. 

Such schemes rocketed in popularity in 2017 after the Government restricted landlords’ tax relief on their mortgage interest. 

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The Telegraph understands one landlord with a £4m portfolio was charged £50,000 by the firm – more than 1pc of the value of their assets. Property118 said its fees were priced to be competitive. 

But in July, the company was issued a “stop notice” by HMRC on its Substantial Incorporation Structure (SIS) and Capital Account Restructure (CAR) plans. 

The taxman is now investigating the plans going back to 2017 and experts estimate landlords with large portfolios could be hit with six-figure liabilities. 

In August, the i newspaper reported that one client had been sent a £666,000 “discovery assessment” in March for unpaid capital gains tax. 

Property118 claims about 460 property investors used the structures. 

Demand for these plans was first sparked by the introduction of the UK tax law Section 24 in 2017.

The legislation removed a landlord’s right to deduct their mortgage interest from their rental income before calculating their tax liability. 

But one way for landlords to avoid the changes was to set up a limited company. As well as getting full tax relief for mortgage interest, they would pay corporation tax at up to 25pc as opposed to income tax at up to 45pc. 

Property118 claimed its so-called SIS plan allowed landlords to transfer their properties into a company without breaching their mortgage agreement and without paying capital gains tax or stamp duty. 

They said no mortgage lenders have challenged the use of SIS or issued breach notices as a result of the beneficial ownership transfer.

Advisers warned that this arrangement could carry serious financial consequences, such as an upfront capital gains tax charge on the transfer. 

Derek Hill, of law firm Fieldfisher, said: “By putting their property into a company without telling the bank, in principle they could default on the mortgage. On top of that, it’s a structure that carries a number of tax risks.” 

Pete Miller, of tax advisers Jerroms Miller, said: “I’ve had clients come up to me and say, ‘is this too good to be true?’. I have always told them not to get into these things.” 

Property118 is fighting HMRC’s decision and has asked landlords to contribute to its legal and business costs. 

So far it has raised more than £285,000 from 270 supporters, according to its JustGiving page. 

The company appealed to the tax tribunal when HMRC issued scheme reference numbers to its two tax plans under the Disclosure of Tax Avoidance Schemes (Dotas) legislation. It said it “paused recommending” the two arrangements after the numbers were allocated. 

Mr Hill is working with some landlords impacted by the scheme.

He said: “To get everyone to recognise they have a problem, to engage with HMRC, is a long and difficult process.

“People may trust Property118 to fix it but in our experience the person who created the tax avoidance scheme is the worst to defend it against HMRC.”

A spokesman for Property118 said: “We believe HMRC’s decision to label these structures as tax avoidance schemes misrepresents the true commercial motivations behind their use. We will continue to support our clients in defending their legitimate and lawful business activities, and we remain committed to challenging HMRC’s position.”

Cotswold Barristers was contacted for comment.

[Wight Flight]

33 minutes ago, spygirl said:

A spokesman for Property118 said: “We believe HMRC’s decision to label these structures as tax avoidance schemes misrepresents the true commercial motivations behind their use

But he actively sold them as tax avoidance schemes.

Guilty. Next.

[Hardhat]

2 hours ago, spygirl said:

Landlords face six-figure bills in tax avoidance row

HMRC could hit buy-to-let owners with capital gains tax and stamp duty

 

 

 

Charlotte GiffordSenior Money Reporter

26 September 2024 11:00am

Have you used one of Property118’s schemes? Please email: [email protected].

Hundreds of landlords could be hit with six-figure bills after using a tax avoidance scheme promoted by a popular property forum.

Property118 sold plans for up to tens of thousands of pounds promising to help buy-to-let owners swerve duties such as capital gains tax and stamp duty. Experts estimate as many as 1,000 landlords used the service.

On September 19, two of its plans were named tax avoidance schemes by HM Revenue and Customs (HMRC), with some users already being slapped with backdated bills from the taxman. 

Accountancy firms told The Telegraph they are now fielding enquiries from panicked property investors in light of the ruling.

Property118 was set up by Mark Alexander, who claims to have helped “thousands of landlords build highly lucrative portfolios” on his LinkedIn profile.

The company – which denies any wrongdoing – drew up its tax avoidance schemes alongside a law firm called Cotswold Barristers, whose registered offices sit in Cotswold Airport. 

Such schemes rocketed in popularity in 2017 after the Government restricted landlords’ tax relief on their mortgage interest. 

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The Telegraph understands one landlord with a £4m portfolio was charged £50,000 by the firm – more than 1pc of the value of their assets. Property118 said its fees were priced to be competitive. 

But in July, the company was issued a “stop notice” by HMRC on its Substantial Incorporation Structure (SIS) and Capital Account Restructure (CAR) plans. 

The taxman is now investigating the plans going back to 2017 and experts estimate landlords with large portfolios could be hit with six-figure liabilities. 

In August, the i newspaper reported that one client had been sent a £666,000 “discovery assessment” in March for unpaid capital gains tax. 

Property118 claims about 460 property investors used the structures. 

Demand for these plans was first sparked by the introduction of the UK tax law Section 24 in 2017.

The legislation removed a landlord’s right to deduct their mortgage interest from their rental income before calculating their tax liability. 

But one way for landlords to avoid the changes was to set up a limited company. As well as getting full tax relief for mortgage interest, they would pay corporation tax at up to 25pc as opposed to income tax at up to 45pc. 

Property118 claimed its so-called SIS plan allowed landlords to transfer their properties into a company without breaching their mortgage agreement and without paying capital gains tax or stamp duty. 

They said no mortgage lenders have challenged the use of SIS or issued breach notices as a result of the beneficial ownership transfer.

Advisers warned that this arrangement could carry serious financial consequences, such as an upfront capital gains tax charge on the transfer. 

Derek Hill, of law firm Fieldfisher, said: “By putting their property into a company without telling the bank, in principle they could default on the mortgage. On top of that, it’s a structure that carries a number of tax risks.” 

Pete Miller, of tax advisers Jerroms Miller, said: “I’ve had clients come up to me and say, ‘is this too good to be true?’. I have always told them not to get into these things.” 

Property118 is fighting HMRC’s decision and has asked landlords to contribute to its legal and business costs. 

So far it has raised more than £285,000 from 270 supporters, according to its JustGiving page. 

The company appealed to the tax tribunal when HMRC issued scheme reference numbers to its two tax plans under the Disclosure of Tax Avoidance Schemes (Dotas) legislation. It said it “paused recommending” the two arrangements after the numbers were allocated. 

Mr Hill is working with some landlords impacted by the scheme.

He said: “To get everyone to recognise they have a problem, to engage with HMRC, is a long and difficult process.

“People may trust Property118 to fix it but in our experience the person who created the tax avoidance scheme is the worst to defend it against HMRC.”

A spokesman for Property118 said: “We believe HMRC’s decision to label these structures as tax avoidance schemes misrepresents the true commercial motivations behind their use. We will continue to support our clients in defending their legitimate and lawful business activities, and we remain committed to challenging HMRC’s position.”

Cotswold Barristers was contacted for comment.

Have the landlords involved got any legal claim against Property 118 for bad advice etc?

Any idea if there's any recourse in law for this kind of thing?

[sarahbell]

On 21/09/2024 at 12:12, Wight Flight said:

Not with 900k immigrants a year they can't.

Indeed.

Without tackling that then we're all fucked 

[eek]

11 hours ago, Hardhat said:

Have the landlords involved got any legal claim against Property 118 for bad advice etc?

Any idea if there's any recourse in law for this kind of thing?

Yep you can claim on the professional indemnity cover of the barristers involved - but I think that was found to top out at £1m (if its valid in the first place) and that at best is going to cover 2 to 3 of the bills not 460 of them.

The only upside of not dealing with it now is that by the time the tax tribunals process the claims and appeals a lot of the landlords will have died from the stress involved.

Edited September 27 by eek

[eek]

Mark has published a "rebuttal" to that Telegraph article https://www.property118.com/rebuttal-to-the-telegraphs-article-landlords-face-six-figure-bills-in-tax-avoidance-row/

The entertaining bit is that it does more harm than good - his argument for restructuring the structure of the investment is the argument for taking limited company mortgages which the scheme explicitly avoided doing..

[spygirl]

2 hours ago, eek said:

Mark has published a "rebuttal" to that Telegraph article https://www.property118.com/rebuttal-to-the-telegraphs-article-landlords-face-six-figure-bills-in-tax-avoidance-row/

The entertaining bit is that it does more harm than good - his argument for restructuring the structure of the investment is the argument for taking limited company mortgages which the scheme explicitly avoided doing..

Does he have a lawyer?

If so why isnt the lawyer shouting  - Dont fuckign say anything esp. online FFS.

He just cant help himself acn he.

 

Mark,
You should know by now that the press never let the truth get in the way of a good story!
Though I was shocked to learn that Cotswold Barristers registered office is based in Cotswold Airport 😮 WTF? 🤷🏻‍♂️

 

 

You should see their chambers, purpose-built, ultra-modern and in a highly desirable upmarket area. Their next door neighbours are a Lamborghini dealership.

[eek]

8 minutes ago, spygirl said:

Does he have a lawyer?

If so why isnt the lawyer shouting  - Dont fuckign say anything esp. online FFS.

He just cant help himself acn he.

 

Mark,
You should know by now that the press never let the truth get in the way of a good story!
Though I was shocked to learn that Cotswold Barristers registered office is based in Cotswold Airport 😮 WTF? 🤷🏻‍♂️

 

 

You should see their chambers, purpose-built, ultra-modern and in a highly desirable upmarket area. Their next door neighbours are a Lamborghini dealership.

I was shocked to see that he thought they were tax experts because literally no one in the chambers was qualified to talk about tax let alone the complex crap their were trying to do that impact multiple niche and specialist areas...

[Wight Flight]

What do we think the,FHL bunch are going to do after the budget?

I assume she will equalise the tax treatment with the BTL brigade. But with 45% CGT will they sell, or possibly hold out for a new government?

It will be very interesting.

[One percent]

5 minutes ago, Wight Flight said:

What do we think the,FHL bunch are going to do after the budget?

I assume she will equalise the tax treatment with the BTL brigade. But with 45% CGT will they sell, or possibly hold out for a new government?

It will be very interesting.

Afaict, a lot of fhl operate on a wing and a prayer. I can’t see a lot of them surviving in the current climate. 

[DurhamBorn]

1 hour ago, Wight Flight said:

What do we think the,FHL bunch are going to do after the budget?

I assume she will equalise the tax treatment with the BTL brigade. But with 45% CGT will they sell, or possibly hold out for a new government?

It will be very interesting.

BTL and FHL are sitting ducks for tax and it was obvious how this would end up over a decade ago.A few houses and they will be looking at 40% of the profit going in tax on the gains.In a pension that would not happen.You need to keep the houses and the work and its going to be more and more work,with more and more costs for more and more risk.Lots could happen in the budget,but BTL profits look sitting ducks for more tax.If they increase it on shares you can just not sell,keep getting the divis while enjoying your time,BTL its sell or do the work.I think for all but the very very good and experienced and the big its over and done as an investment.HMOs will grow and thrive as will big rental companies likely funded through asset managers.Karen from accounts investing her 25% lump sum in a shit hole 2 bed terrace is over.

[sarahbell]

17 hours ago, DurhamBorn said:

BTL and FHL are sitting ducks for tax and it was obvious how this would end up over a decade ago.A few houses and they will be looking at 40% of the profit going in tax on the gains.In a pension that would not happen.You need to keep the houses and the work and its going to be more and more work,with more and more costs for more and more risk.Lots could happen in the budget,but BTL profits look sitting ducks for more tax.If they increase it on shares you can just not sell,keep getting the divis while enjoying your time,BTL its sell or do the work.I think for all but the very very good and experienced and the big its over and done as an investment.HMOs will grow and thrive as will big rental companies likely funded through asset managers.Karen from accounts investing her 25% lump sum in a shit hole 2 bed terrace is over.

They're after your pension contributions too. At least for national insurance according to the article in telegraph