Warning Signs You’ve Entered a Hybrid Partnership Arrangement | Kennedys Accounting

Warning Signs You’ve Entered a Hybrid Partnership Arrangement | Kennedys Accounting

Worried you may have entered a hybrid partnership arrangement? Learn the warning signs, understand HMRC Spotlight 63 and get expert advice from Kennedys Accounting.

If you’re a landlord or property investor, it’s important to understand whether your property ownership structure could fall within the scope of HMRC Spotlight 63.

Many taxpayers entered hybrid partnership arrangements believing they were a legitimate way to reduce Income Tax, Capital Gains Tax (CGT) or Inheritance Tax (IHT). HMRC has since made it clear that it believes these arrangements do not achieve the tax advantages being promoted.

Common Warning Signs

You may have entered a hybrid partnership arrangement if:

• You transferred your property portfolio into a Limited Liability Partnership (LLP).
• A limited company was introduced as a member of the LLP.
• You were advised that rental profits could be allocated to the company to reduce your personal tax liability.
• The arrangement was promoted as a way to reduce Income Tax, Capital Gains Tax or Inheritance Tax while retaining control of your properties.
• You were told the structure had been designed specifically to achieve tax savings for landlords or property investors.
• Having one or more of these features does not necessarily determine your tax position, but it does mean your arrangement should be reviewed by a specialist.

Don’t Wait for HMRC to Contact You

• If you’re unsure whether your property structure could be affected by HMRC Spotlight 63, it’s better to seek advice sooner rather than later.
• At Kennedys Accounting, we specialise in advising landlords and property investors on hybrid partnership arrangements and HMRC Spotlight 63. We can review your structure, explain any potential risks and help you understand your options.
• Book your confidential Spotlight 63 consultation with Kennedys Accounting today and speak to an experienced property tax specialist.

Get in touch – info@kennedysaccounting.uk or call us on 01233 539501.