Property Incorporation Cleared of DOTAS Tag — What It Means for Landlords
Updated: Oct 24
A significant ruling for landlords
In Property 118 Ltd v HMRC, the First Tier Tribunal cancelled the DOTAS reference numbers issued for landlord property-incorporation structures, ruling that avoiding tax was not the main purpose of these arrangements.
Why this matters beyond the case itself
This suggests incorporating a property portfolio for genuine commercial reasons isn't automatically treated as aggressive avoidance. That said, this addresses one specific compliance concern — it doesn't remove the need to get the underlying numbers right.
What landlords should still check before incorporating
Stamp Duty Land Tax (SDLT) — transferring properties into a company can trigger an SDLT charge
Capital Gains Tax (CGT) — may or may not be deferred or relieved depending on structure
Mortgage refinancing costs — limited company buy-to-let products carry different rates and criteria
Ongoing compliance — running a limited company brings its own accounting and filing obligations
FAQs
Does this ruling mean all property incorporation schemes are now tax-avoidance-free? It relates to the specific structures in this case — each landlord's situation should still be assessed individually.
Should I incorporate my portfolio now that this ruling has come out? Possibly — but base the decision on your own figures, not the DOTAS outcome alone.
I was already put off incorporating — should I reconsider? Worth revisiting the conversation with your accountant now.
If you've been considering incorporating your property portfolio, get in touch with Jackson Lee (https://www.jacksonleeaccountants.co.uk/contact-me) for a personalised review.
Need a hand with this? We're accountants in Bury, and our limited company accounts service covers it for a fixed fee.
Talk it through with us
If this affects you, book a free, no-obligation 30-minute chat by phone, Teams or at our Bury office, or see your fixed fee online in 2 minutes. Prefer to talk now? Call 0161 327 0047.
Sources: Ross Martin: Property incorporation schemes not notifiable under DOTAS (https://www.rossmartin.co.uk/sme-tax-news/9070-property-incorporation-schemes-were-not-notifiable-under-dotas)
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