14:57 PM, 13th August 2021, About 2 months ago
Smart Company structures have been all the rage for savvy property entrepreneurs.
In 2019, HMRC launched its task force to investigate any wrongdoing concerning these structures, but now it’s been announced in the Financial Times that the HMRC has disbanded their unit.
So in light of this good news, join myself and Mark Smith as we recap what a smart company is and how it can help you in your property business.
Mark Alexander, Property118 founder said ….
Property118 and Cotswold Barristers have always advocated that the Smart Property Company Structures we recommend are fully compliant with all HMRC legislation and do not fall foul of DOTAS, GAAR or the Settlements Legislation.
Whilst the closure of the HMRC task force looking into Family Investment Companies will be welcome news for some, the HMRC regulations referred to above still need to be observed very closely and people should always seek professional insured advice on structuring their businesses in the optimal way to achieve their short, medium and long term objectives, in particular where any form of business continuity or legacy planning is an important factor.
In response to the following quotation in the Financial Times, Alex Caravello, Property118 Director said …
!The [HMRC] team’s research concluded that people use FICs as a “planning strategy, often with the primary objective of generational wealth transfer and mitigation of inheritance tax”.
The Revenue has obviously kicked the tyres [on them] and ultimately found they are not aggressive vehicles. They are planning vehicles.”
We must really stress that, whilst many (Accountants?) may believe that strategic long term tax planning must somehow be classed as ‘tax avoidance’ and need to registered under DOTAS, or fall foul of GAAR, this statement makes it clear that HMRC distinguishes between strategic business planning “with the primary objective of generational wealth transfer and mitigation of inheritance tax, as differing from ‘aggressive tax avoidance’.
Previous ArticleEaling proposed Licensing schemes