I am a landlord with four properties, and I am in the process of buying two more in Liverpool. I am also a higher-rate taxpayer on a PAYE basis. Can you advise if I could set up an LLP with a corporate partner and allocate the profits to the corporate member, therefore paying corporation tax and avoiding an income tax loan interest relief restriction? Are there any potential stamp duty land tax charges when profits are allocated to the corporate member or the realisation of capital gains tax? 

Arthur Weller replies:  

Creating a partnership with a corporate partner and allocating profits to that corporate partner will not work from a taxation perspective. Anti-avoidance rules brought in some years ago specifically target this scenario by reallocating the company profits to the individual, on which they will have to pay income tax. See HMRC’s Partnership Manual at PM210000 and PM213000 in particular.