Property118 prepares the first draft
Property118 organises the client’s evidence, prepares working tax computations and transaction schedules, and produces draft legal and corporate documents for professional review.
The essential distinction
Draft and coordinate
Professional responsibility
Client-led
A coordinated evidence and drafting pack—not an HMRC clearance application
The pack is designed to turn an agreed commercial direction into an organised, reviewable implementation project. It does not ask HMRC to approve the transaction in advance, and it does not replace the professional advisers who carry the legal, tax, accounting, valuation and mortgage responsibilities.
The advisers verify and adopt
The client’s appointed tax adviser, accountant, solicitor, valuer and mortgage adviser test the matters within their professional remit, correct assumptions and decide whether to amend or adopt the drafts.
The client makes the decisions
The client chooses the advisers, confirms the facts, decides whether and when to proceed, and signs or files documents only after the required professional approvals have been obtained.
Why call it an “application pack”?
It is Property118’s practical description of the dossier assembled to support the proposed incorporation and, for transfers on or after 6 April 2026, the formal Section 162 claim. The actual claim is made by the transferor through Self Assessment, normally with the tax adviser’s approval and submission. The pack is the organised evidence and drafting behind that claim—not a guarantee of relief or an advance clearance from HMRC.
Commercial assessment before implementation
Commercial evidence
Client objectives
Implementation reality
Technical verification
A Strategic Portfolio Review comes first
Property118 does not begin with an assumption that incorporation is the answer. Before incorporation is raised for the client’s consideration, a full Strategic Portfolio Review has already examined the portfolio, the owners’ objectives and the realistic alternatives.
Portfolio economics
- Property-by-property cash flow, yield and return on equity
- Debt concentration, interest-rate exposure and refinancing pressures
- Properties that may be retained, improved, refinanced or sold
Ownership and succession
- Long-term ownership, retirement and business-continuity objectives
- Family succession, control and future participation
- The consequences of doing nothing or restructuring in stages
Risk and flexibility
- Liability management and asset-protection priorities
- Mortgage terms, early repayment charges and lender appetite
- Liquidity, implementation cost and the practical timetable
Tax as one part of the decision
- Personal and company tax comparisons
- Capital Gains Tax, property transfer taxes and future extraction
- Reliefs and claims tested only after the commercial case is understood
The gate to the application pack
Only where the Strategic Portfolio Review indicates that incorporation remains commercially worth considering will the Property118 consultant scope the implementation work and provide a fixed-price quotation for the application pack.
The working dossier
Source material
One agreed blueprint
For tax adviser review
For solicitor review
For company and accountant review
Coordinated project
What a typical application pack contains
No two incorporations are identical, so the final contents depend on the client’s facts, jurisdiction, lending and adviser requirements. The core purpose is always the same: one coordinated evidence base, one set of working assumptions and one controlled route to professional sign-off.
1. Factual evidence file
- A master client, business, property, ownership and liability schedule
- Indexed supporting documents, with gaps and assumptions clearly identified
- A record of valuations, purchase costs, capital expenditure, mortgages, tenancies and business activity
2. Implementation specification
- The proposed transaction, completion date, assets, liabilities and share consideration
- Jurisdiction-specific treatment for England, Wales and Scotland
- Conditions that must be resolved before the documents can be finalised or signed
3. Draft tax calculations
- Property-by-property gains and losses, acquisition costs and valuation evidence
- Draft Section 162 computation, deferred gains and share-base-cost consequences
- Draft property transfer tax calculations and other tax schedules relevant to the facts
4. Draft transaction documents
- Business sale and purchase documentation
- Liability indemnity and, where appropriate in England and Wales, trust documentation
- Scottish drafting instructions or heads of terms for the Scottish solicitor where Scottish property is involved
5. Corporate and completion documents
- Board approvals, share-allotment information and company records
- Draft opening balance sheet and accounting journals
- Completion memorandum, filing calendar and evidence of what was executed and when
6. Adviser review and issue register
- Role-specific review instructions for each adviser
- A controlled register of questions, assumptions, decisions and document changes
- Version control so that one adviser’s amendment is reflected throughout the pack
A draft is deliberately a draft
Property118’s documents are produced to reduce duplication, organise the project and give the client’s advisers a coherent starting point. They must not be signed, relied upon or filed until the responsible professional advisers have reviewed the sections within their remit and the final implementation specification has been agreed.
Property values are central evidence
Mortgage evidence
Professional valuation
Local market evidence
The valuation evidence clients need to provide
The market value of each property affects the tax computations, the value of the business transferred and the shares issued. The evidence must therefore be contemporary, property-specific and capable of review by the client’s tax adviser.
Property118’s recommended route
Hometrack Automated Valuation Model reports
Property118 recommends Hometrack Property Valuation Reports as the standard route because clients can order the Automated Valuation Model (AVM) reports directly, they are generally delivered quickly and they are economical for a multi-property portfolio.
Each report should be saved in full and supplied with the property schedule. Where Hometrack cannot produce a sufficiently confident result, or where a property is unusual, the client’s tax adviser may require another form of valuation evidence.
Why Property118 recommends Hometrack
- Clients order the report directly
- Reports are generally delivered quickly
- A consistent evidence format can be used across the portfolio
- The order page shows the current price before purchase
Acceptable alternative 1
A recent mortgage valuation
A lender or mortgage valuation is acceptable where it is less than six months old and clearly identifies the property, valuation date and assessed value.
Acceptable alternative 2
A RICS valuation
A formal valuation prepared by an appropriately qualified RICS valuer is an accepted alternative and may be preferable for unusual, commercial, mixed-use or higher-value property.
Acceptable alternative 3
Three local estate-agent valuations
Three written market valuations from local estate agents may be used as an alternative. They should be independent, property-specific, dated and retained in full.
Please do not guess the values
Tell the Property118 consultant which evidence route you are using and the proposed valuation date. A valuation that is out of date, relates to the wrong interest or ignores an unusual tenure, condition or use may need to be replaced or adjusted. The client’s appointed tax adviser must ultimately confirm the values used in the computations and claim.
Client evidence checklist
People and business
Base cost and title
The going concern
Market value
Debt and lender terms
Tax and accounting
The transferee company
Project team
What clients normally need to provide
The application pack can only be as reliable as the facts and documents supplied. Missing records are not automatically fatal, but they must be identified early so that the client and advisers can agree how the gap will be resolved or evidenced.
A. Client, ownership and business history
- Full legal names, current addresses and the identity details requested securely by the appointed advisers
- Who owns each property and in what proportions, including any changes in ownership
- Partnership agreements, partnership tax returns, profit-sharing arrangements and capital-account records where relevant
- The date the property business began, how it has developed and any earlier restructuring
- A practical description of the owners’ activities, time commitment, systems, contractors, agents and decision-making
B. Property acquisition and ownership records
- Full address, title number, tenure, jurisdiction and ownership percentage for every property
- Completion statements, acquisition contracts and evidence of original purchase price
- SDLT, LTT or LBTT paid, acquisition legal fees and other allowable purchase costs
- Invoices and records for capital improvements, with dates and descriptions
- Any period of private occupation, main-residence use, change of use, lease variation or previous disposal of an interest
C. Current property and letting information
- Current rent, tenancy status and managing-agent details for every property
- Tenancy agreements, deposit records, arrears and material tenant disputes
- Licences, insurance, compliance records and contracts that form part of the continuing business
- Properties already marketed, under offer, intended for sale or expected to be refinanced
- Any property or asset proposed to be excluded, with the commercial and legal reason
D. Valuation evidence
- A Hometrack AVM report for each suitable property, or one of the accepted alternatives
- The valuation date and confirmation that the report relates to the correct property and interest
- Any evidence explaining unusual condition, tenure, planning, commercial use or development potential
- A schedule reconciling each valuation to the property list and the tax computation
E. Mortgages and other liabilities
- The latest mortgage statement for every secured facility
- The mortgage offer, incorporated conditions and any special conditions or later variations
- Current balance, interest rate, fixed-rate expiry, monthly payment and early repayment charge
- A current redemption statement where a sale or refinance forms part of the implementation
- Lender correspondence, consent, notification or waiver documents, and any arrears or breach notices
- Tenancy deposits, trade creditors, loans and other genuine business liabilities
F. Accounts and tax records
- The latest property-business accounts and supporting ledgers, with earlier years where requested
- Relevant Self Assessment returns, property pages, partnership returns and tax computations
- Capital losses, income-tax losses, capital-allowance records and earlier elections or claims
- Debtors, creditors, tenancy-deposit liabilities and bank statements needed for reconciliation
- Tax residence or other personal circumstances that the tax adviser says affect the transaction
G. Company and share information
- Company name, number, registered office, directors, shareholders and Persons with Significant Control
- Current articles, share classes, existing allotments and any shareholders’ agreement
- Details of assets, liabilities or activities already inside an existing company
- The proposed ownership and share rights identified through the Strategic Portfolio Review, subject to professional confirmation
- Company bank and accounting arrangements needed for completion and post-completion operation
H. Adviser and timetable information
- Names, firms, email addresses and telephone numbers for the client’s tax adviser, accountant, solicitor, mortgage adviser and valuer
- Confirmation that Property118 may share relevant drafts and evidence with the appointed team
- Any existing advice, engagement letters, lender deadlines, fixed-rate expiry dates, proposed sales or tax-return deadlines
- A request for introductions where the client does not yet have an adviser with suitable experience
Disclosure must be complete
Clients should disclose disputes, informal ownership arrangements, missing deeds, unreported changes, mortgage issues, related-party transactions, previous tax advice and any fact that may not fit the standard pattern. Property118 will record uncertainties in the issue register rather than silently assume an answer.
Draft outputs for professional review
Core transaction document
Liability workstream
England and Wales only
Scotland
Company workstream
Tax workstream
The principal documents Property118 may prepare
The exact suite follows the agreed implementation specification. Not every client needs every document, and no document is operative merely because it appears in the pack.
Business Sale and Purchase Agreement
A first draft describing the whole continuing business, assets, consideration, completion conditions and jurisdiction-specific documents. It is supplied for the client’s solicitor and tax adviser to review, amend and adopt.
Indemnity Agreement
A first draft dealing with the economic burden of genuine business liabilities that remain legally in the transferors’ names during any transitional period. The solicitor and tax adviser must confirm its legal and tax treatment.
England-and-Wales trust documentation
Where the agreed route separates registered legal title from beneficial ownership, a draft deed and related instructions may be prepared for an England-and-Wales solicitor to settle. The solicitor must review title, mortgage terms, restrictions, execution and Land Registry consequences.
Scottish implementation instructions
Scottish land does not use the English beneficial-ownership analysis. Where Scottish property is involved, Property118 may prepare commercial heads or drafting instructions, but the Scottish solicitor must settle the operative Scots-law contracts, securities, LBTT treatment and later dispositions.
Corporate approvals and share documents
Draft board minutes, share-allotment information, opening balance-sheet schedules, company-register actions and completion records are prepared for the company solicitor and accountant to confirm.
Claim and computation schedules
Draft property gains, Section 162 calculations, share consideration, deferred gains, share base costs and supporting claim narrative are prepared for the appointed tax adviser to verify and submit in the appropriate return.
Clear allocation of responsibility
Decision-maker
Project manager and drafting co-ordinator
Tax and accounting responsibility
Legal responsibility
Scots-law responsibility
Specialist evidence and finance
Who is responsible for what?
The pack is intended to reduce duplicated work and professional fees—not to blur professional responsibilities. Each participant reviews the same factual base but remains responsible for the conclusions and documents within their own engagement.
The client
- Owns the commercial decisions and chooses the professional team
- Provides complete and accurate information and promptly identifies errors or omissions
- Reviews the final property, liability and ownership schedules
- Does not sign or authorise filing until the required advisers have approved the documents within their remit
Property118
- Provides project management, evidence organisation, modelling and first-draft preparation
- Coordinates advisers, versions, questions and dependencies across the project
- Maintains the issue register and updates affected drafts after agreed decisions
- Does not provide the insured or regulated professional advice, legal sign-off, tax filing or mortgage recommendation required from the client’s appointed advisers
Accountant or tax adviser
- Determines whether the facts satisfy the Section 162 business, going-concern, whole-assets and share-consideration conditions
- Verifies valuations, base costs, gains, losses, liabilities, partnership evidence and capital accounts
- Confirms the opening balance sheet, share consideration, accounting entries and tax treatment
- Amends or adopts the claim and computations and is responsible for the final Self Assessment submission where engaged to file it
England-and-Wales solicitor
- Reviews title, ownership, mortgages, lender covenants and any consent or notification requirements
- Settles or replaces the business sale, indemnity, trust and completion documentation
- Advises on restrictions, registration, tenancies, deposits, insurance, data protection and later legal-title transfer
- Controls execution and legal completion for the matters within the retainer
Scottish solicitor
- Settles the operative Scots-law sale contracts, missives, dispositions and completion documents
- Reviews standard securities and lender requirements
- Advises on substantial performance, LBTT filings and later title transfer
- Confirms any amendments needed to the wider UK business-transfer documents
Valuer and mortgage adviser
- The valuer provides the independent market evidence required by the tax adviser
- The mortgage adviser obtains and explains lending options, redemption figures, early repayment charges and refinance sequencing
- Any regulated valuation or mortgage recommendation remains the responsibility of the appropriately authorised professional, not Property118
Existing advisers are welcome
Property118 is happy to work alongside the client’s chosen or existing advisers where they are willing to engage with the coordinated process. Where suitable expertise is not already in place, the Property118 consultant can make introductions to trusted and experienced alternatives. The client remains free to decide whom to appoint.
One controlled project
How the application-pack process works
A coordinated sequence matters because a change to one fact—such as a value, excluded property, mortgage balance or share allocation—can alter the computations, legal documents and filings elsewhere in the pack.
Strategic Portfolio Review completed
The commercial objectives, portfolio economics, alternatives and major risks are already understood before implementation is scoped.
Fixed-price quotation and scope
The client contacts the Property118 consultant, who confirms the proposed workstreams, assumptions, exclusions, adviser dependencies and fixed price.
Professional team confirmed
The client supplies the names and contact details of existing advisers or asks the consultant to arrange introductions.
Evidence collected and indexed
Property, valuation, mortgage, tax, accounting, company and operational records are assembled and reconciled against a master checklist.
First application draft produced
Property118 prepares the draft implementation specification, computations, schedules, legal templates and role-specific adviser instructions.
Coordinated professional review
Each adviser tests the relevant work, records questions and proposed amendments, and identifies any extra evidence or specialist advice required.
Issues resolved and specification frozen
The client makes the remaining commercial choices. Agreed changes are carried through every affected computation and document before approval.
Execution, claims and completion record
The appointed professionals control signing, legal completion, company filings, tax returns and claims. A completion memorandum records what happened and any post-completion actions.
The issue register prevents silent assumptions
Every question or proposed amendment that may affect a fact, computation, recommendation or transaction document is assigned to a responsible decision-maker. An issue is not treated as closed until its source and consequences have been recorded and every affected draft has been updated. Silence from an adviser is not approval.
Tax return and contemporaneous evidence
Draft support
Professional adoption
Important limits
How the pack supports the formal Section 162 claim
For business transfers on or after 6 April 2026, Section 162 relief is no longer simply automatic when the statutory conditions are met: the transferor must make a satisfactory claim. HMRC states that the claim is made in the Self Assessment return for the year of transfer and is expected to include brief transaction details, tax computations and the type of business transferred.
What Property118 prepares
- A draft claim narrative linked to the transaction documents and evidence
- The supporting property and business computations
- A schedule of the assets, liabilities, shares and deferred gains
- An indexed file designed to explain the position consistently if questions are later raised
What the tax adviser decides
- Whether the statutory conditions are satisfied on the final facts
- What amendments are required to the draft computations and narrative
- How the claim is presented in the relevant Self Assessment return
- What records should be retained and how any HMRC enquiry should be answered
What the pack cannot do
- Guarantee that HMRC will accept the claim without enquiry
- Replace the tax adviser’s judgement or filing responsibility
- Cure an inaccurate valuation, incomplete disclosure or defective execution
- Turn an investment activity into a qualifying business merely by adding documents
Final control point
Nothing should be signed until the pack is coherent
The benefit of project management is lost if documents are executed while material questions remain open. Before completion, the client and advisers should be able to confirm each of the following from one consistent set of papers.
- The final property and asset schedule agrees across the computations and legal documents
- Valuations, acquisition costs, improvements, mortgage balances and liabilities have been evidenced
- The tax adviser has approved or amended the Section 162 analysis and the claim position
- The solicitor has settled the operative documents, title and lender issues, execution and completion mechanics
- The company share allotment, accounting entries and opening balance sheet have been confirmed
- SDLT, LTT or LBTT responsibilities and filing dates have been assigned
- All blocking items in the issue register are closed and the implementation specification is frozen
- The client understands the commercial consequences and has chosen to proceed
Common questions
Frequently asked questions
Is the application pack an HMRC clearance application?
No. It is Property118’s coordinated evidence and drafting dossier. For transfers on or after 6 April 2026, the formal Section 162 claim is made by the transferor through Self Assessment. HMRC may still enquire into the facts, computations or documents.
Does Property118 provide the tax or legal advice?
No. Property118 provides project management, modelling, evidence organisation and first drafts. The client’s appointed tax and legal advisers provide the insured professional advice, make amendments, adopt the final documents and control filing or execution within their remit.
Can my existing accountant and solicitor be involved?
Yes. Property118 is happy to work with the client’s chosen or existing advisers. Please give the consultant their names and contact details at the outset so that scope, responsibilities and information-sharing can be agreed.
What happens if my adviser has little landlord-incorporation experience?
The client may retain that adviser, appoint an additional specialist or request introductions to trusted and experienced alternatives. The decision remains the client’s.
Which valuation route should I use?
Property118 recommends Hometrack AVMs as the standard route for convenience and cost. A mortgage valuation less than six months old, a RICS valuation or three written valuations from local estate agents are acceptable alternatives, subject to the client’s tax adviser confirming that the evidence is suitable for the particular property and valuation date.
What if Hometrack cannot value one of my properties?
Use an accepted alternative. Hometrack may decline to produce a report where its AVM does not have sufficient confidence. Unusual, commercial, mixed-use or development property may require a RICS or specialist valuation.
Do I need a mortgage statement for every property?
Yes, where a property is mortgaged. The pack needs the current balance and the relevant facility terms for each secured liability. A redemption statement may also be required where sale or refinancing is part of the proposed sequence.
Does the application pack guarantee Section 162 relief?
No. Relief depends on the law and the client’s final facts, documents, values, consideration and execution. The pack is designed to make those matters transparent and reviewable; it cannot guarantee HMRC’s acceptance or prevent an enquiry.
Is the process the same in Scotland?
No. The UK Section 162 tax conditions still need to be considered, but Scottish land and security law require separate Scots-law documents and LBTT analysis. English trust documentation must not be used as a substitute for advice from a Scottish solicitor.
How do I start?
Contact your Property118 consultant for a fixed-price quotation. Confirm the names and contact details of the advisers you want Property118 to work with, or ask the consultant to arrange introductions.
Primary and supporting materials
Legislation and HMRC
HMRC manual
HMRC manual
HMRC manual
HMRC manual
HMRC manual
HMRC policy paper
HMRC helpsheet
Valuation evidence
HM Land Registry
Companies House
Property118
Property118
Property118
Evidence and further reading
The professional advisers should use the legislation and current official guidance applicable at the transaction date. Property118’s guides explain the practical context but do not replace that professional review.
Section 162 TCGA 1992
The statutory incorporation-relief provision.
CG65700: introduction
HMRC’s overview of the relief and the claim requirement for transfers from 6 April 2026.
CG65710: conditions
Going concern, whole-business assets and share consideration.
CG65715: meaning of business
HMRC’s factual approach to whether property activity amounts to a business for Section 162.
CG65720: share consideration
The requirement for shares to be issued as consideration and HMRC’s treatment of other consideration.
CG65745: liabilities and ESC D32
HMRC’s published treatment of genuine business liabilities taken over on incorporation.
Incorporation Relief claims process
The Self Assessment claim requirement and information expected for transfers from 6 April 2026.
HS276 Incorporation Relief
HMRC’s Self Assessment helpsheet and yearly guidance.
Hometrack Property Valuation Report
Direct ordering page for the AVM reports Property118 generally recommends.
Practice Guide 24
Official guidance on private trusts of land and restrictions in England and Wales.
Form SH01
Return of allotment of shares and company filing information.
Strategic Landlord Incorporation Guide
Property118’s wider guide to the commercial, financing, tax and implementation issues.
Beneficial-interest white paper
The England-and-Wales legal and commercial background to transferring and later reuniting beneficial interest.
Understanding SIS arrangements
The related explanation of mortgage terms, beneficial ownership and Section 162 relief.
Progressing to the application pack
Speak to your Property118 consultant
Ask for a fixed-price quotation for the Section 162 incorporation application pack. At the same time, confirm the names and contact details of the existing professional advisers you want Property118 to work with, or request introductions to trusted and experienced alternatives.