Property Scheme Investors face Shock Tax Demands

Posted on 12 February, 2015 by Neil Bird

Investors in government sponsored Business Premises Renovation Allowances (BPRA) schemes face unexpected demands to repay large sums of tax relief, the Financial Times reports.

Collection of words referring to taxes in the UK.

BPRA was introduced by the government to attract tax-deductible investment into the renovation of disused commercial properties in deprived areas. The scheme offered tax relief on up to 100 per cent of the investment and proved popular among higher-rate taxpayers seeking to mitigate their liability.

Following claims that the scheme was being exploited, tax inspectors began looking closely at BPRA and have found that a number of arrangements “exhibit some features that have been part of avoidance schemes that HMRC has challenged in the past.”

Now investors in at least three BPRA partnerships have been issued with accelerated payment demands which, in some cases, run into hundreds of thousands of pounds.

Michael Avient, a personal tax partner at UHY Hacker Young, told the FT that the tax bills will come as a shock to investors.

“People went into these investments in good faith,” he said. “It is a government scheme and they are now having their tax reliefs removed without warning.

However, a spokesperson for Ingenious, one of the BPRA schemes reportedly targeted in the HMRC action, maintains that the demands will eventually be shown to have been issued in error.

“There appears to be a separate APN team operating independently from the HMRC inspector charged with assessing our partnership and others.

“This team seems to be applying a blanket 30 per cent clawback based on what they have observed elsewhere in the market. This episode again illustrates the grotesque unfairness of the new system.”




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

The best places to stay on the Riviera

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants

BA cuts 12,000 jobs, unions hit back

Media Streaming Service See Record Subscriptions