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Tax Avoidance: NRLA suspends link with Less Tax 4 Landlords

The National Residential Landlords Association has suspended its link with Less Tax 4 Landlords.

This follows publicity surrounding Less Tax 4 Landlords and the issuing of new guidance to landlords regarding so-called Hybrid Partnership schemes. 

At the end of last week HMRC issued a warning over a tax avoidance marketed as a tax planning option available to individual property landlords to structure their property business - it’s sometimes referred to as a hybrid business model.


HMRC alleges that the scheme attempts to by-pass mortgage interest relief restrictions allowing increased deductions for mortgage interest, reduce the tax payable on profits generated by the property business, cut Capital Gains Tax payable when properties are sold, and reduce Inheritance Tax payable on death. And HMRC warns landlords to steer clear of such a scheme or, if they are already involved, to withdraw and let the tax authorities know. 

The NRLA statement announcing the suspension of the link is here:

"The NRLA exists to support its members in running profitable, sustainable, and above all legally compliant businesses. This includes paying all the tax legally due against their lettings activity. 

"We pride ourselves in being experts in the field of landlord and tenant operations but recognise that at times our members need a wider network of qualified and accredited specialists. Tax advice is one such area. When selecting third parties we do so in the knowledge that our members put trust in the NRLA to advertise only legitimate and reputable companies with an offer likely to be of value to responsible landlords.  

"In the case of tax advice and accountancy services, we recognise and carry advertising on behalf of several specialist firms. All of these companies undergo robust due diligence checks and are expected to maintain relevant qualifications and affiliations as required by their industry and regulator(s).  

"In recent weeks we have become aware of speculation concerning business structures promoted by one of the NRLA’s commercial partners, Less Tax 4 Landlords Limited.  Less Tax 4 Landlords is an appropriately qualified and affiliated firm and part of a group regulated by the FCA and SRA respectively.  

"However, we have a duty to ensure that all companies promoted to the NRLA membership offer the highest quality and level of service. As such, while we investigate these claims, we have suspended partnership activity with Less Tax for Landlords."  

And separately, Less Tax 4 Landlords has this statement on its website: 

"This is an important message to all clients and contacts of Less Tax for Landlords. We are currently contacting HMRC regarding the recent publication of new guidance on their website for Hybrid Partnership arrangements, a type of structure that LT4L use with some of our clients.

"The implication is that there is a requirement to register with HMRC under DOTAS, and we are currently looking to clarify our position to ensure that we remain compliant at all times. As a company, we are committed to providing the best possible service and we are doing everything we can to obtain the full picture, at which point we will advise further.

"Please note that whilst we undertake this exercise we will not be accepting new appointments in line with the guidelines, although existing clients can contact us through the usual channels."

You can see our story about the HMRC guidance in question here.

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    If the NRLA had been more vocal in its opposition to Section 24 none of these tax schemes would have ever been dreamt up. It is an absolute travesty that roughly 50% of private rental properties are owned by portfolio landlords who are impacted by Section 24. Therefore all those tenants are at risk of paying more rent than they otherwise would purely because it goes straight to HMRC as an additional tax that no other industry is subjected to. The landlord is worse off and the tenant is worse off. How is that in any way right or justifiable?
    Where were our industry representatives back in 2015 when this was invented?
    Why haven't the tenant activists had far more to say about the impact of Section 24 on tenants.
    Most importantly why has it taken 8 years for HMRC to start questioning the incorporation schemes?
    Landlords are a very diverse group of standard issue regular people. Most of us don't have a degree or a high level business background or a team of advisors. Shouldn't the government have some kind of duty of care towards us and not put us in the position of being charged huge fees for schemes they have done nothing to curtail? And what on earth were the NRLA doing promoting something that now appears to be untoward?

    John  Adams

    100% Agree with you since the merger the NRLA have lost touch with the members and seem to busy promoting their own interests.

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    Jo, agree with your whole comment but can’t leave out Section 21 without which its not a Business at all.
    Why else would landlords who had Property paid for or Re-payment Mortgaged landlords rushed to get out.
    Section 24 was to get rid of interest only Loans which were totally tax efficient. The Scheme was more like Renting to Re-rent rather than buying if I may say so, compared to Repayment loans.
    The incorporation Schemes that sucked in so many were supposed to be legitimate and I had been through this discussion many times with the people running the Schemes.
    I understand they had an Office in an Office Block where Revenue had Offices in the same Block up the Marlborough Rd, and at that time had tax clearance, so now tell us different all those years later. Incidentally I didn’t avail of the Scheme because I’m as stubborn as a mule.
    The help 2 Buy Scheme’s including no SD was not to help First time Buyers, that was to help Big Developers off load their massively over priced Flats, expect more of those help to get into trouble Schemes.
    Anyway S.21, S24 and most of the other rules, regulation’s and tax changes is to ease the path-in for the Big Boy’s & Institution’s to move-in and corner the Market simple but they don’t realise the almighty collapse it can cause.


    Michael - you have overlooked the fact we had to put in 25% or 40% deposits to get the BTL mortgages. Plus in recent years the 3% SDLT surcharge. Often a bit of a refurb before it can be let. So a fairly chunky wedge of our money tied up in the property.
    When I started out my mortgages were repayment. In the early days they were mainly commercial bank loans. Interest only really took off in the early 2000s and was simply a mechanism to ramp up the number of rental properties. Homeownership had been pretty toxic through the 1990s. Lots of negative equity and repossessions. Everyone knew someone who was either trapped in something way too small due to negative equity or had lost everything with a repossession. A lot of young people were nervous of buying. Interest only BTL mortgages were a great way of us expanding our portfolios and providing the rental homes people desperately wanted.

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    The Less tax for Landlords was set up by a team of experts and Consultants of the Financial Business Group in 2015, the key to planned growth what happened to that. So the Scheme was operating before they even started to introduce the first phase of S.24 why weren’t any issues raised until now after S.24 has been fully implemented.

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    I guess the reason why this scam was so popular, was the fact the PRS is in such a mess 🤔 landlords were so desperate to mitigate their tax liability they would ignore common sense.

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    Jo. I know all this and have no argument with you but I know there was many only putting down only 5% at times and weren’t lenders asking for Rent to be 125% of the loan. Buying in London you wouldn’t be putting down 45% / 50% deposit you wouldn’t be buying at all and with repayment loans you needed to have 2 properties paid off to buy a third as it would take 3 to service the loan on one with all the other costs & taxes or have a hell of a good job, there was no way rents would be 125% of the loan that was all fraud and self certification, or a pretend miras.

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    Micheal, absolutely correct. I believe the banks will create another sub prime crisis when they flog their developments to pension funds etc. I note the the John Lewis partnership has parted ways with their rental guru, and that the boss is going.
    Last looked at canary wharf property company is trading atv40% of its price and that the daily telegraph is hyping leisure uses for empty office blocks.

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    Michael, there are people in London buying with cash and no mortgages. They are the ones use this ammunition to get the sellers to reduce the price by offering cash purchase and completing quickly. They may get a mortgage 6 months later. There are foreigners as well as UK citizens with a lot of cash to buy in London.

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    Vibha. Its not like that in the main in my view and there’s not that much cash knocking about and with property so expensive in London. The way I see it many of those guys are landlords already with possibly some paid off. They will have already secured the money again one of those and not against the one they a buying quickly, so there you have it cash buyer.
    Sometimes the one they are buying needs work or in bad condition and would be difficult to get a Mortgage on, it might suit the seller to take a hit.
    The other question is Developers are well in the pockets of the Banks so as Edwin said and bang on the money, when things get tight those developments / Flats will be flogged off to Pension funds and Institutions, the game plan don’t feature us at all.

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    Their are wars going on and two countries Ukraine and Russia are very corrupt ? Both countries have relatives in Britain, so where do you put your graft money. Further economic aid from Britain follows the same route and of course new York skyscrapers.


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