New queries, issue 4561

DOTAS worries

Arrangements on rented property were advised but HMRC may seek a penalty.

I have been dealing with two arrangements on rented property.

In the first A rents a property to his limited company B Ltd for a small rent and B Ltd rents it to a third party at a higher rent. In the second scenario C rents a property to his wife D for a small rent and D rents it to a third party at a higher rent. I wrote to HMRC in 2013 explaining the first arrangement and received a letter from the Anti-Avoidance Group (Intelligence) saying that this was acceptable.

These arrangements have come to the attention of HMRC’s Counter-Avoidance DOTAS (Disclosure of Tax Avoidance Schemes) Enforcement department which issued notices under FA 2004  s 313A. This was because I had not notified under DOTAS and received...