Where Should (And Shouldn’t) Landlords Get Tax Advice From?

Landlords Tax Advice

Need expert tax advice on how to manage your BTL rental bizz?

Unfortunately I can’t help you – never have been able to, never will be able to.

But never have I felt so compelled to urge fellow landlords to only use suitably qualified tax accountants and sensible solutions to manage tax dodging optimisation. Due diligence is paramount.

I’ve been prompted to ring the village bell to call for this community assembly after a good old fashioned schoolyard fist-fight broke out – over landlord tax, of all things. It’s been an absolute bloodbath so far, with calculators and monocles flying all over the place.

Ladies, gents, and non-binary friends, we have a situation on our hands.

Dan Neidle, of Tax Policy Associates, a seemingly highly reputable tax-lawyer-chap, with qualifications and experience seeping out of his gills – this is the same guy that took down former Chancellor of the Exchequer, Nadhim Zahawi, after exposing his £27m tax avoidance scandal – has given us all a brutal reminder of why it’s imperative to choose our landlord/property tax advisors and experts wisely.

In this blog post, I’ll be covering:

  • DANGER: Undercover Landlord Tax Avoidance Schemes
  • Where landlords should get expert tax advice from
  • Where landlords shouldn’t get expert tax advice from

DANGER: Undercover Landlord Tax Avoidance Schemes

Unfortunately, the introduction of Section 24 (an amendment to the UK tax code, which has restricted landlords’ from deducting interest payments on mortgages from their taxable rental income) has created an industry of dodgy tax advisers preying on landlords with magic tax avoidance solutions – and according to Dan Neide, none of them work, creating more liability and problems than they solve.

In the space of a couple of weeks, Dan has published a couple of scathing articles to his library of investigations, against two very prominent landlord tax planning services that he claims offers said schemes:

  • Property118“a tax avoidance scheme for buy-to-let landlords that defaults their mortgage and increases their tax bill”
  • Less Tax for Landlords (LT4L)“the £50m landlord tax avoidance scheme that HMRC say doesn’t work, and can trigger a mortgage default”

Whilst both companies claim to offer landlords with solutions to lessen the blow of Section 24, it’s worth noting that they use different structures to achieve the outcome. And believe you me, neither of these tax services are available for bargain basement prices – we’re talking tens of thousands of pounds in fees.

  • Property118 uses a structure what they refer to as “Substantial Incorporation Structure”
  • LT4L uses a “Hybrid Business Model” structure

(I’m not going to get into the details of how the structures work, Dan already did that nicely in his reports. Besides, it’s irrelevant for the purpose of this blog post.)

Apparently tax experts have shown concerns with these kinds of structures for years, alleging that they don’t work and are no more than tax avoidance schemes. But that clearly didn’t deter either company from flogging the structures and cashing in.

If it’s true that neither works, and they are truly undercover tax avoidance schemes, then any landlord that has paid a small fortune to rearrange their rental businesses in accordance to these structures have essentially pissed their money down the drain and will need to spend even more to untangle the mess.

Dan has called Property118.com and their legal partner Cotswold Barristers landlord tax planning service to be, I quote,

“possibly the worst tax avoidance scheme ever”


And he has accused Less Tax for Landlords’ structure to be not being much better. In fact, he believes it’s worse.

“A different scheme, but with some commonalities; in many senses an even worse scheme than Property118’s.”

Dan shares his thoughts in detail in his reports, both of which are technical and surgical deconstructions of each respective landlord tax planning solution being touted, explaining why he believes the “tax avoidance schemes” fail spectacularly, resulting in clients paying much more tax than is saved and also likely defaulting the mortgage.

Property118’s position

At the time of writing this blog post, Property118 and their partner Cotswold Barristers have issued a response refuting the allegations, claiming “None of the detriments forecast in Dan Neidle’s article has ever come to pass across this significant body of casework.”, but Dan appeared less than inspired by their defence.

Relentless. That’s what we like to see.

A lot of interesting details were exposed in Dan’s assault, but the following specifically caught my eye, mostly because I found them both ridiculous and hilarious:

  • Property118 is an unregulated adviser which works in a joint venture with a barristers chambers called Cotswold Barristers. But neither Property118 nor Cotswold Barristers appear to have any members or employees with tax qualifications.
  • The head honcho of Cotswold Barristers was previously suspended for a month by the Bar Standards Board for acting negligently and “failing to act with reasonable competence”
  • Property118 and Cotswold Barristers often charge fees of over £40,000 to relatively small landlords earning less than £100k/year.

Uhm, EXCUSE ME, WHAT? Say it ain’t so!

£40,000 for a tax service provided by an outfit without tax qualifications. It just seems so silly. And a weird purchase for anyone to make, in my opinion.

I have to ask! If someone is going to unload such an obscene amount on a specialist service, why wouldn’t they ensure they’re benefiting from expert advice from a dork of the highest order, with distinguished qualifications longer than my twig and berries, within the specific field? In this case, tax qualifications.

That’s not a swipe at Property118/Cotswold Barristers, but rather the consumer, and it’s actually just a general view on consumerism.

Less Tax for Landlords’ (LT4L) position

Meanwhile, HMRC have caught wind of Dan’s investigation on LT4L, and they were quick to publish this article in their “Tax avoidance” archive, stating that in their view, the hybrid business model “does not work”

Basically, confirming Dan’s assessment.

Once news broke, Less Tax for Landlords’ were quick to deface their homepage with a disclaimer, notifying us that they’re waiting for confirmation from HMRC as they investigate further.

Well, that’s certainly not inspiring.

Surely they should have done that before selling it?

LT4L disclaimer

What’s most concerning about LT4L’s situation is the fact that they have (or at least, had) sponsorship deals with very reputable landlord service providers and therefore have been heavily promoted, including from the likes of NRLA landlord association, National Landlord Investment Show and Property Tribes, so that means the contagion is likely widespread.

Dan seems particularly irritated that these big outlets entered into sponsorship deals without doing their due diligence, so now he’s literally asking [on Twitter], “why have you been promoting these clowns?”, LOL

Fair question.

Unfortunately, I think the answer is a lot less complicated than the tax avoidance schemes being pitched.

Money talks!

Update (13th November 2023): Dan Neidle has featured on accountingweb.co.uk’s podcast, where he goes into detail and breaks down his concerns with Property118’s and LT4L’s tax avoidance schemes in a way that’s very easy to understand.

I’ve embedded the podcast below – it’s an interesting listen for anyone that’s following the story. Timestamp: 3:50min – 24min.

Bottom line: avoid ALL weird-arse Landlord Tax solutions to be safe

Alas, there isn’t a shortage of companies selling mind-bending tax avoidance solutions (Property118 and LT4L seem to be the most prominent though), but Dan seems confident that none of the structures work, simply because there are three choices, and only three choices when it comes to dealing with Section 24:

  1. Incorporate – Instruct a proper tax adviser, incorporate a company, and move the business to that company. The mortgage interest will then be fully deductible against the company’s corporation tax.
  2. Don’t incorporate – Continue as you are, bearing the cost of the section 24 non-deductible interest.
  3. Sell-up – If section 24 makes your rental business uneconomical, then selling up might be a sensible option.

Anything else being offered is snake oil, especially if it includes complex structures with Trusts, LLPs, or offshore arrangements. I know, I know, we all want to believe in the magic pill, really badly – one that will vanish our tax liabilities into fairy dust. Who knows, maybe Jack’s magic bean supplier also flogs magic tax evaporating pills.

Needless to say, I’m not qualified to make any judgments. I’m just the shameless industry gossip columnist, knocking back the vino, and dishing out the sauce.

We certainly can speculate though, with the information we have available.

Ultimately, in one corner, there’s a debate between Dan Neidle and Property118, but with only one of them being a reputable tax lawyer and having actual tax qualifications.

I mean, well, okay!

In the other corner, HMRC have already stated the Hybrid Business Model that LT4L uses does not work in their view.

Well, isn’t that kinda’ game over?

No matter which way you slice it, the situation doesn’t look great for any company selling these jazzy tax reduction solutions to landlords, least of all the two featured companies, and not just because one of the most reputable and qualified tax lawyers in the country has a problem with them. It’s because his exceptionally qualified friends do, too.

you’ve got me, the mortgage lenders themselves, the author of the leading textbook on stamp duty, the author of the leading textbooks on capital gains tax and income tax, and a former President of the Chartered Institute of Taxation (who, when a senior HMRC official, oversaw the introduction of DOTAS). Plus a dozen other specialists, ranging from KCs to retired HMRC inspectors. And all the professionals commenting on Twitter and LinkedIn, where opinion is virtually unanimous.

Source: Extracted from his blog post

Yeah, I think I’m siding with Dan and his posy on this one. I’m going to personally avoid all these doolally restructuring options at all costs (not that I would have used one anyways, I’d probably need to sell both my kidneys just for the entry level package), and I can only recommend that you do the same.


Landlord Tax Avoidance Schemes

Tax Policy Associates advice for anyone that has opted into a tax avoidance scheme!

The following is Dan’s advice for anyone that has used Property118’s tax avoidance scheme, but presumably he’d suggest the same for anyone that has used Less Tax for Landlords’ or any other scheme.

We would strongly suggest you seek advice from an independent tax professional, in particular a tax lawyer or an accountant who is a member of a regulated tax body (e.g. ACCA, ATT, CIOT, ICAEW, ICAS or STEP). Given the potential for a mortgage default, we would also suggest you urgently seek advice from a solicitor experienced with trusts and mortgages/real estate finance (e.g. a member of STEP).

We would advise against approaching Property118 given the obvious potential for a conflict of interest.

That actually sounds pretty, errrm, terrifying. But arguably, perhaps not as terrifying as stewing in the mess for longer than necessary.

Of course, I don’t know if any of that is necessary – presumably Property118 believes it is not.

Either way, none of this is comforting or reassuring to hear.

I’m going to sit back and watch how the situation unfolds.

In the meantime, I’d be interested to hear your thoughts on this whole ordeal. Are you in the market to pick up a £40,000 tax avoidance scheme?

Where should landlords get expert tax advice from?

In the midst of all the drama, it did get me wondering (and now I’m finally getting to the actual point of my blog post – which will take one mere sentence to address), who should landlords feel confident in turning to for professional tax advice? This seems like a minefield.

That’s now the obvious question, right?

So who did I turn to? No other than Dan Neidle (via a Tweet), of course.

Dan Neidle’s recommendation is to get tax advice from CIOT and/or ATT qualified accountants or lawyers, and the safest approach is to only instruct an ICAEW-regulated accounting firm.

So basically, anyone reputable with an actual tax qualification?

Right, got it.

Sounds so obvious when you say it out loud.

If anything, these brawls’ have reinforced my belief in due diligence and always choosing the right people for the job, whoever that may be.

A few general thoughts on tax liability and acquiring expert advice…

  • I’ve always been under the belief that when anyone is trying to endorse a tax avoidance (or reduction) strategy that isn’t text-book, or one that seems overly complicated and/or requires acrobatic hoop-jumping, I’m naturally inclined to believe that I’m potentially being led into murky waters and there’s a good chance I’d be skirting the lines if I follow through. Thanks, but no thanks.
  • In situations like this, I’m reminded of the age old proverb; a true expert should be able to clearly explain their craft to a layman so they can also understand.

    Point being, if someone can’t explain their service to me so it makes sense, I’m out. “Trust me, I’m an expert” won’t cut it.

  • BTL/renting out property is a simple business model, so it’s very hard for me to conceive that it requires more than keeping taxes simple!

Where landlords shouldn’t get expert tax advice from (how to identify cowboys)!

In a timely follow-up post, Dan published his tips on how to identify cowboys.

To summarise the highlights and my personal favourite warning signs:

  • Any tax advice should come from someone at a respected regulated firm, and/or with a tax qualification. You need to be speaking to the actual tax adviser, and not unqualified people giving tax advice.
  • Anyone claiming to be “HMRC approved”. HMRC doesn’t approve any tax planning.
  • Anyone shilling acrobatic tax planning solutions, providing reassurances like, “MRC has never challenged any of our structures”.
  • Anyone pitching “our unique systems”, “our proprietary strategy”, etc. When it comes to tax, sensible people do what everyone else is doing.
  • “We’ve glowing testimonials from dozens of clients” – this is how a salesman talks.
  • No discussion of risks and downsides.
  • Pressure to go ahead/sign a contract.
  • “Your normal advisers won’t be familiar with these obscure rules”. A common tactic to pull clients away from trusted existing advisers.
  • No mention of ATED – a special tax that will apply if a corporate or LLP (with a corporate partner) holds residential property.

Once again, all sounds legit. I dig it.

To conclude (and final disclaimers)…

Before I sign off to start preparing my sparkly new – all bells and whistles – tax planning service (be sure to look out for my sales email – coming to your inbox soon, for only £39,899! That’s what you call undercutting the competition – entrepreneurship 101), I do want to clarify that I have no ill will against Property118.com or LT4L, nor do I have an axe to grind against either – I’m not sharing Dan’s investigations out of malice or with an agenda.

However, I am sharing them because of my unwavering allegiance to our community. If I feel like important information has come to light and is worth sharing, you can bet your bottom dollar on me squealing like a pig, and allowing you to decide what you want to do with the information.

Other than a few Tweets post-publication of the investigation, I have no prior or current relationship with Dan Neidle or Tax Policy Associates. I only became aware of him and his company’s work after I saw their investigation on Property118’s tax planning service circulating on Twitter/X. Admittedly, I am now a fan.

To reiterate, I’m not qualified to determine whether Property118’s or LT4Ls’ tax planning services are as bent as nine bob note or not – I genuinely hope they’re legit for their own sake and for the sake of their clients – but what I do know is that a seemingly very qualified and reputable tax lawyer – and his qualified posy – appear to have grave concerns with them (and every other type of landlord tax avoidance scheme that exists), so we’d be foolish to ignore them.

Be careful out there!

Landlord out xo

39 Join the Conversation...

Guest Avatar
GriffMG 20th September, 2023 @ 09:35

That was enlightening, not read Dan's blog yet, tax planning is sensible but when it's a product like this is... then it is normal for the seller to make more than the buyer and for all the contingent liability to lie with the buyer too - are the sellers going to be there when the man with a wig starts making decisions? I doubt it.

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GriffMG 20th September, 2023 @ 11:20

Now read the blog post from Dan as well, he does seem to be very thorough.

If it looks like a sham, smells like a sham and is likely to make someone else more money that you... it's probably a sham.

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Lucy Fryer 20th September, 2023 @ 12:05

Really useful to have attention drawn to the tax advice offered by Property 118 and Cotswold Barristers via Dan Neidle. I should say I have found Property 118 useful, particularly when I was just starting out over 20 years ago. And they also have GOOD advice to offer.

However, over the years I have found that overly complicated and "clever" tax schemes usually seem require a large upfront payment from the client (me) to the adviser. So far I have not pursued any of them. I wish I could say that this is because I'm super clever. Actually it's more a combination of me not understanding the scheme and therefore not pressing the "go" button, and not wanting to pay the fees. And then the matter slips to the sludge at the bottom of the inbox until the moment has passed. But I have certainly saved myself a lot of time, complication and expense in the process. Is that called Divine Inertia?!😊

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Paul goulder 20th September, 2023 @ 12:05

We were one of the landlords who fell for this scheme
It’s cost 98k to get the whole thing set up
A trust was formed which turned out to be worthless
We were not told at the time that we would not be in control of our properties in the the trust
I.e could nt borrow funds due to the trust
We ended up getting it overturned by the courts which cost another £30k plus.
We are now in the process of trying to get our costs back but this is proving to be an uphill task and again costly
This has been an on going worry since 2019 when we were alerted that the scheme was faulty
We got absolutely no help from Mark Alexander or Mark Smith they washed their hands of it.
We are absolutely delighted that somebody has now cottoned on to this and hopefully stop this happening to landlords in the future whom like ourselves have worked very hard to get a portfolio

Paul goulder
Goulder’s Rental Properties ltd

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GriffMG 20th September, 2023 @ 12:17

Divine Inertia is a wonderful expression.

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Ouch 20th September, 2023 @ 12:43

Dan Coachafer of new2property​ is clearly one of the affiliates!

As the adage goes , if it sounds too good to be true….

Great article as ever

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nemi 20th September, 2023 @ 13:41

I didn't go ahead with them simply because it cost too much.

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daisy 20th September, 2023 @ 14:04

Recently I had a session with them and paid for £400 for such session, was going to go ahead with their recommendation and then I found out their recommendation is not going to work. I have asked them for the refund of £400 and they did refund me at the end.

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daisy 20th September, 2023 @ 14:18

@ Paul goulder sorry to hear what has happened to you,maybe you should publish your story on the social media (facebook, twitter and etc) and tag property118, maybe they will have to respond to you. Anyway, I hope you will get your money back in the end. All the best

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AALI 20th September, 2023 @ 14:50

I have been a member of property118 almost since its inception and often wanted the Landlord to investigate them. I was never tempted to sign up because of their hefty fees. You pay £400 just for a chat and then, I thought £20K, to proceed. Didn't realise it was much more than that.

Anyway recently I was banned from the property118 website. My crime - stating that Property 118 was not apolitical. It does tend to spout Tory nonsense and is anti-Labour, anti-immigrant, but loves refugee housing schemes, but not refugees themselves. To date they have not returned any of my messages about why I was banned.

I am glad that being banned from the site is the worst I have been affected, unlike their other unfortunate victims.

As for the advice found on property118, most of it is amateurish and unreliable.

I am glad The Landlord is on top of them.

Like Lucy, I would like to say it was Divine Inertia that stopped me from being ripped off by them, but more likely my naturally sceptical nature. The old adage of if it sounds too good to be true then it isn't so comes to mine. But there's nothing good about Property118.

I will now be unsubscribing from their website.. oh, wait I can't as I am banned, but their daily emails keep coming and being banned can't unsubscribe! Scpoundrals.

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AALI 20th September, 2023 @ 16:55

Update to my last message. I have now unsubscribed from Property118.

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Josh Williams 20th September, 2023 @ 19:48

Another great blog post!!!

I did come across this tax scheme and as a lawyer and landlord myself, I was sceptical that what they were suggesting was legit. Having looked into it at the time, I settled on the decision that it was not for me so left it alone. Dan has confirmed my suspicions!

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Helen 20th September, 2023 @ 22:14

Thanks for sharing this. What a situation for landlords. makes me wonder if one can trust anyone today.
@ Paul Goulder Hope you get something back so keep fighting for YOUR money

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adam 20th September, 2023 @ 22:52

FAntastic !!!

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The Secret Landlord 21st September, 2023 @ 06:47

LOVE your blog posts xxx :)

I remember years ago seeing this and sending the details to my accountant. He has many professional qualifications and he said: No.

I trust his advice.

I am a portfolio landlord and one of the many who has been royally stiffed by S24. Years ago we looked at incorporating, LTD, LLP and all that jazz, but it was too complicated and expensive for the size of the portfolio and the number of years it had been owned.

The advice was simple: sell slowly, pay off debt, sleep well.

It's a very boring solution, but I feel OK with the decision.

I still fundamentally disagree with the unfair taxation and inequality that is S24, and everything I told my local MP many years ago has happened, but if you cannot change the idiots, and you want to remain in this sector, you have to change yourself.

Despite the battles I've had to keep my properties (and there have been times where I thought I would sell the lot) I enjoy what I do and so I am not going to let some govt policy take it off me!

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Kim Surey 21st September, 2023 @ 08:26


Property guru Richard Norris was attempting to direct me to these people. No wonder as he presumably stood to gain £2.000.
Apparently with £8.000 for his course and the work of this company to set up a "smart company" i would have had £20.000 less in my bank account.
Apparently I would be completely free of my inheritance tax burden?
Good to go with your gut with such people.
30 years of renting without any of this so called "expert" advice is evidence you should only trust yourself.

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Mark 21st September, 2023 @ 09:35

Should Dan Neidl, be threatened formally by solicitors acting for Catwolds Toxic Barstoolers or Peoperty 118, I suggest he refer them to the only relevant test case in these matters.

Arkell vs Pressdram (1972)

For those who don't know its significance, Google it.

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Karen Earthy 21st September, 2023 @ 11:06

Again…… thank you for all your informative and frankly, scarily hilarious information. Please don’t ever give up!

The Landlord Avatar
The Landlord 21st September, 2023 @ 12:16


Yup, I also thought the post/investigation by Dan was very good. He broke everything down nicely.

In my mind, and as stated in the post, this seems to be a debate over tax law between two parties, but with only one of them being a [reputable] tax lawyer and having actual tax qualifications.

I wonder what the betting odds would be for this fight?

The Landlord Avatar
The Landlord 21st September, 2023 @ 12:35

@Lucy Fryer

Thanks Lucy!

Yup, I definitely agree with you on both points.

Property118 offer some good advice and helpful discussions, I don't dispute that.

I'm with you 100% on the not understanding part being the barrier to entry, along with the fees. As some of have said in the comments, they charge £400 for the initial consultation alone (I didn't know that), which may or may not be helpful. That's a big upfront investment for many landlords.

It's down to my ignorance (i.e. not understanding the various schemes) for why I have not been able to become an affiliate partner with any tax firms with good conscious, despite the big pay days.

But also, when it comes to tax, I've always just kept it very simple, even if that means I'm not taking advantage of every loophole. I can live (and sleep) with that. So flogging schemes that I don't understand or even believe in would be unconscionable.

As Dan mentions in one of his tips, "When it comes to tax, sensible people do what everyone else is doing."

I'll never know for sure, but I also feel like I've saved myself a lot of time, complication and expense for simply not having a clue. Ignorance really can be bliss :)

The Landlord Avatar
The Landlord 21st September, 2023 @ 12:36

@Paul goulder

Gosh, that sounds awful. Really sorry to hear that. I wish you the best of luck.

Out of curiosity, who alerted you that the scheme is faulty?

The Landlord Avatar
The Landlord 21st September, 2023 @ 12:47


Thanks, appreciate it.

I've been notified of a few of their affiliates, one of them being quite a popular YouTuber.

Pretty concerning if the allegations are true, to be honest, because it gives you an idea of how widespread the problem might be.

The Landlord Avatar
The Landlord 21st September, 2023 @ 13:26


That's shocking to hear.

Doesn't their tax consultation come with a money-back guarantee? I think I saw somewhere that it does, but I can't be sure.

How did you find out that their recommendation is not going to work?

The Landlord Avatar
The Landlord 21st September, 2023 @ 13:38


It's unclear what their fees actually are, because they don't seem to be publicly disclosed from what I can tell. But I guess they'd argue every case is different.

The £40,000 fee came from Dan's investigation, but clearly they charge a lot more in some circumstances, as per Paul's story.

Can't really say I've read enough on Property118's website to know whether they're apolitical or not, to be honest. It would be a shame if they did ban you for the reason you said.

But glad you managed to unsubscribe from their pesky mailing list (if that's what you really wanted), lol.

The Landlord Avatar
The Landlord 21st September, 2023 @ 13:56


Many thanks, appreciate it.

I've personally never been sold on tax avoidance schemes in general, by nature they scare me! But yup, similarly, Dan's investigation also confirmed to me that they're best avoided, and sticking to text-book practises is the safest option.

The Landlord Avatar
The Landlord 21st September, 2023 @ 14:00


Thanks Helen, and you're very welcome.

Yup, agreed, it's potentially devastating.

If anything, this investigation is an important reminder to be extremely careful and to also rely on your gut instincts (seems like many relied on theirs and as a result avoided getting trapped in this potential fiasco).

The Landlord Avatar
The Landlord 21st September, 2023 @ 14:12

@The Secret Landlord!!!

Is that really you? Welcome over to my humble abode, buddy :)

As I've mentioned in a few comments already, I think keeping it text-book and simple is the best way to go when it comes to tax, otherwise you never know if someone will eventually coming knocking.

Sure, it may not be as optimal as a fancy scheme, but it sure as hell is easier to sleep at night sticking to mundane.

I use one accountant firm under a retainer to manage my businesses, and they've never offered me anything other than simple and stringent solutions. There's a reason for that.

Yup, S24 is unfair (it drives me bonkers just thinking about it), but I think you definitely made the right decision, to restructure your business in order to reduce debt, as opposed to jumping through hoops to reduce your tax liability.

The Landlord Avatar
The Landlord 21st September, 2023 @ 14:18

@Kim Surey

Lol, I'm actually amazed at how many "property gurus" are affiliated with promoting Property118's tax planning services, I'm discovering more and more. The scale of the scheme must be pretty significant.

100% with you. Stick to the tried and tested formulas, keep it simple, and stay clear of schemes.

The Landlord Avatar
The Landlord 21st September, 2023 @ 14:21


Lol, noted.

To be fair, Dan didn't seem phased at all by the "vague legal threat", which is why he published the investigation and continued to warn people of it on Twitter, using some pretty damning language.

I guess that's a testament to how confident he is in his analysis.

The Landlord Avatar
The Landlord 21st September, 2023 @ 14:26


Thanks Karen, and you're very welcome.

I think you summed it up perfectly, the situation is "scarily hilarious"

If Dan's analysis is on point, then it's pretty incredible that they're charging so much for a tax planning service with no tax qualifications. That requires a serious brass neck, LOL!

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David Myth 21st September, 2023 @ 16:34

Interesting and helpful article for landlords

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Alan 21st September, 2023 @ 18:00

I have a modest sum of £150K which I hope to invest in some propeties.

Having watched a lot of 118 afffiliated youtube content I approached a potential accountant with my ideas of setting up a new company with their suggesed tax 'efficient' recomendations.

Without mentioning their name he immediately said 'Let me guess... Cotswold Baristers'
He went on to inform me that they have a number of clients being investigated by HMRC at great cost after following their planning advice.

Thanks for your informative blog, I hope his saves a few people from pain.

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Paul Barrett 5th October, 2023 @ 18:55

I believe that many LL turned to these avoidance schenes out of desperation.

S24 was an immediate shock to many overleveraged LL.

Remember S24 was introduced when IR were very low and even so LL could see that S24 rendered their businesses unviable.

The problem for many LL is that they have remortgaged so that even selling up wasn't viable as they would not have sufficient surplus sales proceeds to pay CGT bills.

So LL couldn't afford to sell.
They couldn't afford S24 taxes.
They certainly couldn't afford to incorporate.

So no surprise that desperate LL sought escape options to survive S24 taxes.

So basically LL unable to cope with S24 taxes were essentially bankrupts walking.

I believe many recognised this which is why like a drowning man they turned to these avoidance schemes.

In one fell swoop S24 rendered viable businesses as unviable.

Yes Govt gave a few years to lessen the initial impact of S24 but that didn't make any difference to LL rendered unviable by S24.

The only real hope for these LL is that there are sufficient surplus sales proceeds to cover CGT

But invariably it will require LL selling off all their properties.

I do wonder how many corporate LL are the ones who have used these avoidance schemes.

If they work out what their circumstances are nany will find that they are technically bankrupt

They will need to sell their homes and rent.

Hide the sales proceeds in cash.

They they need to start the sell off of all their properties.

Invariably at the end of the sales process they won't have sufficient to pay the last CGT bill.

HMRC will come after the LL assets and wages.

For those LL who are in professions which DONT permit them to be bankrupt they face loss of profession as well

Still I suppose HMRC can't take much from an unemployed LL!!

S24 must surely be counted as one of if not the most iniquitous tax ever imposed.

The fact that it was imposed retrospectively was even more iniquitous.

It was and is an ingenious tax that was purposely designed to eradicate the vast majority of mortgaged sole trader LL.

The only frustrating thing for Osborne was that low IR assisted LL to survive.

Clearly with IR having increased the impact of S24 has reached the height which Osborne wanted.

Consequently S24 LL are now desperately selling up.

Incorporating for many new LL just isn't worth it.

S24 renders investment unviable.

No surprise there are few new LL!!

Or rather not many using the long-term letting business models.

Now that HMRC has made the final determination on these 'dodgy'S24 avoidance schenes there will be many LL bankrupted.

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Jeremy 5th October, 2023 @ 19:01

Less Tax 4 Landlords - very interesting read in the *other* blog and HMRC's article about this Hybrid Model. I've looked into possibly jumping into it and one point that is not covered by The Landlord, Dan or HMRC is that within LT4L videos they actually state that if setting this up purely to avoid tax, it is not the right thing. The LLP part if it requires that you are genuinely intending to grow the business - using excess profits to grow. They say that then makes the LLP hybrid model legally acceptable to HMRC.

I don't know anything tax wise, but certainly something to watch (having not jumped in)

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Berry Bigtime 6th October, 2023 @ 09:14

@Jeremy (No. 34) - that point is covered by Dan in his blog:

"So, in short, the LT4L answer is that there’s no need to worry about the 2014 legislation, unless there is a “tax motivation”. This is hopelessly wrong as a matter of tax law. It’s also a bit silly, when it’s clear their profit allocation to the corporate member of the LLP is entirely tax motivated.

The rules don’t contain a motive or purpose test.

In the LT4L structure, the corporate member provides no capital and no services – it follows that all the profits allocated to it will be reversed by the mixed-partnership rules. The overall commerciality (or not) of the structure isn’t relevant."

In short, the model isn't acceptable to HMRC no matter what the motivation is.

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Knew it was rubbish 6th October, 2023 @ 10:49

They stated in a sales talk at the Landlord Show in London that with corporation tax at 25% and dividend tax at 33.75% which adds up to over 58% tax!

Clearly the 33.75% Div tax is from the remaining 75% after CT, not the 100% before CT

So if they couldn't get that right ...

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jayson 20th October, 2023 @ 08:12

Don't touch property 118 with a barge pole..!

I had the 400-quid initial consultation, and the ongoing setup charges were unbelievable, it all sounded supposed to have to wait so many years I was told so as not to be challenged by HMRC why would they say that? got me worried from that point, why should I hide anything based on their advice ?, didn't sound like a good start to me and was confirmed by real tax advisers who knew exactly who I had been speaking to when I told them what I had done and what they said was the method of their scheme... I feel very sorry for Paul Goulder and his wife above, that is the kind of money that ruins people so my guess is there's a mountain of people like Paul out there and at some point, they will come knocking on 118 doors for their money back .! glad I decided to keep well away, mark alexander isn't even qualified in tax and neither are any of their people its actually unbelievable.!!!

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Kim Surey 20th October, 2023 @ 11:22

I will say one positive thing for 118.

I have learned a lot of things from their communications which I was not aware of even after 30 years of letting property out.

So a big thanks for that.

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jayson 20th October, 2023 @ 11:41

The Mark Alexander Circus is definitely in town, 
It's all very funny watching him attack DN in this two-way war of words, property 118 seems to be all piling in on the forums and weighing into the fight, it's tragic in honesty it seems Alexander will at any cost try to save face when the reality of the situation is nor him or anyone in his organization or the barristers for that matter have a single qualification between them all, while they fight with increasing confusion, a whole host of reason and regulation issues with a man who clearly does? on top of that they are unregulated for the activity they have been pushing on landlords for years since the collapse in disgrace of his previous boiler room where two people were jailed.... so yes is this just another clever scheme.?
but what now, what happens to the millions spent on this advice that's now very quickly turning to shit as mark alexander goes down the plug hole pulling everyone down with him, the fallout is going to be unimaginable and then the vulture HMRC will swoop in along with a ton of legal claims and the landlord whos already paid dearly is in the spotlight..?

















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