Health warning Property 118 has been issued with an HMRC Stop Notice for one of its Tax Avoidance Schemes.

Instead of incorporating my 7 properties I opted to make a large contribution to my private pension to reduce my taxable earnings to lower my tax bracket (s24 makes no differences for basic rate tax payers) but it’s locked until I’m 57.. but no different to it been locked in a company structure for me anyway as I have a PAYE salary and can take 25% of my pension tax free, and get tax relief when pay in, and it compounds away in a global EFT fund. Personal buy to lets rates are cheaper, no stat accounts. Arguably robbing myself today for tomorrow but hey ho but seemed the better option. It helps also my wife works part time and half the properties are hers. I got a hard sell from 118 but when told them my thoughts and don’t think they could really argue against my logic. Hope this helps others with tax planning.

The Landlords Union promotes BICT to its members as part and parcel of incorporation of property rental businesses. Prior to doing so, for our own due diligence purposes, we sought Counsels opinion from Pump Court Tax Chambers.

Excellent info. Thanks Josh

well said

Without reading the full article I don’t know if this is being critiqued as a suggested long term/permanent setup, or as a stepping stone toward full incorporation. I do know propety118 and have multiple colleagues who have done business with them with nothing but stellar results and feedback - and a completely satisfied taxman. When looking to incorporate a leveraged portfolio held personally, there are multiple steps necessary over a number of years to qualify for incorporation relief, which mitigates any SDLT and rolls in any CGT liability, which could be a substantial sum. If this setup is but one stepping stone on the path from personally owned properties to fully incorporated, then it most certainly is not avoidance, it’s just one method by which to make use of the incorporation relief mechanism created by HMRC, which demands certain proofs be met along the way.

What should one be concerned with had they followed this approach? As far as I was aware Proeprty118 work with a barrister.