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Dan Neidle @danneidle.bsky.social · 1d

if HMRC said that's "legal" then I'm the Queen of Sheba.

Dan Neidle @danneidle.bsky.social · 2d

And if you like valuation spreadsheets, you can follow me here or subscribe for free updates at taxpolicy.org.uk/subscribe

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Dan Neidle @danneidle.bsky.social · 2d

Longer version of this thread here: buff.ly/3k8Uqtl

buff.ly

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Dan Neidle @danneidle.bsky.social · 2d

If the Government is serious about cracking down on tax avoidance then firms like Property118 have to be regulated.

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Dan Neidle @danneidle.bsky.social · 2d

It's a mis-selling scandal when HMRC challenges the avoidance and the taxpayer has to pay up

It's a cost to all of us when HMRC misses it, and the taxpayer gets away with it.

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Dan Neidle @danneidle.bsky.social · 2d

Which brings us back to where we started.

Most of the HMRC losses from tax avoidance aren't from multinationals or billionaires - they're from small businesses, who've often been sold disastrous schemes by unregulated advisers.

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Dan Neidle @danneidle.bsky.social · 2d

The Government is about to introduce regulation for tax advisers.

But it will only apply to agents who interact with HMRC; not those, like Property118, who stay in the shadows

www.gov.uk/government/p...

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Dan Neidle @danneidle.bsky.social · 2d

That leaves a Property118's client with no recourse if, as here, the tax advice is wrong. Worse, HMRC will likely be able to say the client was "careless" in relying upon an adviser who said they weren't providing definitive advice.

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Dan Neidle @danneidle.bsky.social · 2d

At the back of Property118's glossy brochure is this.

The firm is unregulated and uninsured. They try to cover themselves by saying clients should ask their other advisers to "review and confirm". But the list of other advisers doesn't include actual tax advisers. Guess why.

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Dan Neidle @danneidle.bsky.social · 2d

The client thought they were avoiding inheritance tax in the future. They end up with inheritance tax today.

But they can sue Property118, who are fully insured. And report them to their regulator.

Right?

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Dan Neidle @danneidle.bsky.social · 2d

The upshot of our example is (on simplified assumptions) growth shares in a £5m property company end up being worth £1.2m. So there's an immediate £175k inheritance tax charge, and then a ten yearly charge of £170k+

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Dan Neidle @danneidle.bsky.social · 2d

There's lots of ways to value shares - the simplest is to calculate the "expected value" of the shares across various growth scenarios, and discount for time, illiquidity and lack of control. We've a simple worked example here: taxpolicy.org.uk/2025/10/06/p...

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Dan Neidle @danneidle.bsky.social · 2d

And that's the question inheritance tax asks: what's the market value of the shares?

You don't get to say: gosh, it's really hard... who knows?

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Dan Neidle @danneidle.bsky.social · 2d

You don't need any tax knowledge to know for a fact the "growth shares" have value.

Imagine you hold these shares, entitling you to all the growth of a £5m property business, with no risk and no work required. Would you give them away for free?

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Dan Neidle @danneidle.bsky.social · 2d

The "determinable value" rule seems to be completely invented by Property118 out of thin air. It's not in any legislation, any guidance or anywhere else that we can see.

It's great salesmanship. It's also codswallop.

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Dan Neidle @danneidle.bsky.social · 2d

But Property118 aren't worried about this, because they say the growth shares have zero value. After all, at the point they're issued they're valueless. And after ten years - well, who can say?

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Dan Neidle @danneidle.bsky.social · 2d

Trusts are often dangerous tax planning. A gift into trust creates a "chargeable lifetime transfer" - immediate IHT at 20%. Then the trust pays a "anniversary charge" every ten years.

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Dan Neidle @danneidle.bsky.social · 2d

And by magic inheritance tax will never apply to more than £5m of the business - because all future value is in the "growth shares" which you don't own.

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Dan Neidle @danneidle.bsky.social · 2d

4. The growth shares are put into a discretionary trust so that the kids can't run off with the shares, lose them in a divorce, etc.

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Dan Neidle @danneidle.bsky.social · 2d

3. The company then issues your children with shares that entitle them to all capital growth of the company over £5m - "growth shares".

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Dan Neidle @danneidle.bsky.social · 2d

2. The company issues you shares that give you complete control of the company, entitle you to all dividends, and entitle you to all the current £5m capital value of the company (so-called "freezer" shares).

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Dan Neidle @danneidle.bsky.social · 2d

The scheme works like this:

1. You have (say) a £5m property rental business in a company, and you're worried about a £2m inheritance tax bill when you die. Or an even bigger bill in the future, when the business becomes worth much more.

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Dan Neidle @danneidle.bsky.social · 2d

The media focus on inheritance tax has created an irresistible opportunity for unregulated tax firms to hawk IHT schemes.

One of those firms is "Property118" - they market "family investment companies" to landlords as an inheritance‑tax magic bullet.

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Dan Neidle @danneidle.bsky.social · 2d

A much longer version of this thread, with statutory references and rather too many footnotes, is here: buff.ly/3k8Uqtl

buff.ly

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Dan Neidle @danneidle.bsky.social · 2d

Tax advice in the UK is an unregulated Wild West.

The biggest losers aren’t billionaires — it’s ordinary small businesses sold shiny “avoidance” that blows up.

When HMRC catches it, clients face huge bills. When HMRC doesn’t, the rest of us foot the cost. 🧵

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