HMRC have published their latest One-to-Many letters campaign, this time focusing on the use of 'hybrid structures' by some landlords, involving an LLP. This planning was recently featured in HMRC's 'Spotlight 63'.

The letters come from HMRC's Wealthy Team and target agents and their clients involved in tax planning schemes using a Limited Liability Partnership (LLP) and corporate members. These planning arrangements have been the subject of the recent Spotlight 63.

  • The arrangements try to avoid tax by allowing individual or joint property landlords to transfer their properties to a Limited Liability Partnership (LLP) with a corporate member.
  • The aim of the planning is to allocate a level of profit that keeps the individual as a basic rate taxpayer and allocates the rest to the corporate member, who can claim deductions for expenses such as mortgage payments.
  • HMRC do not believe this planning works as:

The letters request that the taxpayers:

  • Withdraw from the schemes.
  • Make a disclosure by 31 January 2024 by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..
  • Settle their tax liabilities.

If this is not done, HMRC may open an enquiry. 

Useful guides on this topic

DOTAS: Disclosure Of Tax Avoidance Schemes
What are the Disclosure Of Tax Avoidance Schemes (DOTAS) rules? When should you disclose your use of a tax avoidance scheme? What are the consequences of non-disclosure? How are penalties calculated?

Penalties: DOTAS
What are the penalties for failure to disclose under the Disclosure of Tax Avoidance Schemes (DOTAS) regulations?

Transfer of assets and income streams through partnerships
What are the rules for the transfer of assets and income streams through partnerships? When do they apply?

Mixed members: Partnerships with company members
What is a mixed-member partnership? How are the profits of a mixed-member partnership taxed? What tax adjustments are required? Are there any relieving provisions?

IHT Business Property Relief
A guide explaining what is Business Property Relief, when it can apply and pitfalls and planning points.

External link

HMRC One-to-Many letter

Spotlight 63: Property business arrangements involving hybrid partnerships 

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