HMRC has £645.5m of potential additional tax under consideration across the real-estate businesses handled by its Large Business Directorate, up approximately 40% from £461m a year earlier. For property companies undertaking acquisitions, refinancing and group restructures, the more important development is that HMRC's scrutiny increasingly extends to the transactions and financing arrangements surrounding them.
The figures have emerged through HMRC's annual Large Business compliance data and analysis by law firm Bryan Cave Leighton Paisner. They show that real estate accounted for £645,480,179 of tax under consideration at 31 March 2026.
That figure needs careful interpretation. HMRC explicitly states that tax under consideration is not tax known to be owed or unpaid. It is an estimate of the maximum potential additional liability associated with risks being investigated before a full examination of the facts and relevant law has taken place.
HMRC says that once an enquiry is completed, the liability may be lower or there may be no further tax due at all. The £645m figure is therefore a measure of issues currently under scrutiny rather than a tax bill already established against the property sector.
What the Latest Figures Show
HMRC recorded £645.5m of tax under consideration in the real-estate sector at 31 March 2026, compared with approximately £461m a year earlier.
That represents an increase of around 40%. The data relates to enquiries handled by HMRC's Large Business Directorate and can cover Corporation Tax, VAT, PAYE, National Insurance contributions and other taxes and duties.
Crucially, HMRC says tax under consideration is a maximum potential liability used to guide enquiries. It is not established tax owed by the businesses concerned.
Why the £645m Figure Needs to Be Reported Carefully
The headline number is large enough to imply that HMRC has uncovered hundreds of millions of pounds of unpaid property-sector tax. That is not what the data says.
HMRC describes tax under consideration as a risk-management measure. When an issue is identified, the department estimates the maximum amount that could potentially be at stake before completing the investigation. The figure can then reduce substantially as facts are established, legal arguments are resolved and enquiries close.
This distinction matters commercially because the rise should not be interpreted as evidence that Britain's major property groups have suddenly become 40% less compliant.
BCLP partner Elizabeth Bradley instead points to HMRC's increased compliance activity, including greater use of resources and data analytics to examine transactions and financing arrangements. BCLP's assessment is that the growing number of issues being identified for detailed review does not necessarily demonstrate greater non-compliance; it demonstrates a more intensive compliance environment.
Financing Arrangements Are Part of the Picture
That reference to financing is particularly relevant to property businesses because real-estate transactions frequently involve more than a straightforward purchase by a single company using a single mortgage.
A substantial acquisition might involve one SPV holding the property, another group company contributing equity, shareholder loans, intra-group funding, senior bank or specialist debt, overseas investors and guarantees or security from other companies within the group.
A refinance can be equally complicated. Existing debt may need to move between entities, intercompany balances may be repaid or replaced, security released and retaken, and fresh equity introduced alongside the new facility.
None of those arrangements is problematic merely because it is complex. The issue is that the commercial, legal, tax and financing consequences are connected.
The Key Question for a Property Borrower
Before asking a lender to approve a complex company and security structure, establish whether the tax and legal advisers expect that structure to remain in place.
A perfectly acceptable credit proposal can become a different lending transaction if the borrower, ownership chain, shareholder debt or security package subsequently changes.
Why Tax and Finance Should Run in Parallel
Historically, property finance can be treated as a sequential process. The commercial terms are agreed, a lender is approached, credit approval is obtained and lawyers then begin working through the structure.
That approach becomes increasingly risky as transactions become more complex.
Imagine a property group acquiring a £10m commercial asset through a newly incorporated SPV. The proposed structure includes £3m of shareholder equity, an intercompany loan from another group entity and a £6m senior facility.
The lender may approve the acquisition based on that borrower, ownership structure, source of equity and proposed security package.
If the tax advisers subsequently recommend that the acquisition should instead be completed through another group company, or that the shareholder funding needs to be structured differently, the lender may need to reassess part or all of the transaction.
That can mean new credit approval, revised legal documentation, fresh corporate searches, additional KYC and AML work, changed guarantees or security and potentially a different lender altogether.
The issue is not that the tax advice has obstructed the financing. The problem is that the workstreams were conducted in the wrong order.
Corporate Property Finance Is Increasingly About the Structure Around the Asset
On a simple owner-occupied mortgage, the lender principally considers the borrower, income, property and affordability. Corporate property finance can involve a much broader legal and financial architecture.
Overseas Ownership Can Add Another Layer
The need for coordination becomes particularly clear where overseas investors, holding companies or lenders are involved.
An internationally owned property group may have a UK SPV holding the asset but shareholders, parent companies or financing elsewhere. The lender needs to understand the ownership chain, source of equity, guarantees and relevant jurisdictions before it can complete its own credit and compliance processes.
At the same time, the client's tax advisers may be considering the treatment of financing costs, withholding taxes, transfer pricing, distributions, group relationships and other cross-border issues.
Willow should not and does not determine those tax consequences. The financing task is narrower: once the professional advisers have established how the transaction should be structured, identify lenders prepared to fund that structure and determine whether their requirements create any conflicts with it.
Shareholder Loans Can Matter to the Senior Lender
A shareholder or intercompany loan can appear to be an internal accounting matter, but it can have direct consequences for senior debt.
The senior lender may require shareholder debt to be subordinated. It may restrict repayment while the facility is outstanding or require a formal deed of priority. The lender may also distinguish between genuine equity and debt when assessing how much sponsor capital remains at risk in the transaction.
If professional advice changes the amount, terms or entity providing that shareholder funding, the senior debt analysis can therefore change too.
That is precisely why the intended capital structure should be shared with both the tax advisers and prospective lender before the transaction has progressed too far.
Intra-Group Refinancing Can Be More Complicated Than Moving One Mortgage
Portfolio property businesses frequently refinance several assets or entities at once. A new lender may repay existing facilities, release charges over multiple properties and take fresh security across selected group companies.
At the same time, the business may be considering moving debt internally, distributing refinance proceeds or reorganising the ownership of particular assets.
The finance adviser needs to understand which parts of the proposed structure are fixed and which remain subject to legal or tax advice.
There is little value in obtaining an attractive credit-backed term sheet that assumes cross-collateralisation across four companies if the advisers later conclude that one of those companies should sit outside the transaction.
HMRC Is Also Becoming Less Willing to Give Advance Certainty in Some Cases
The BCLP analysis highlights a second issue for property companies: businesses are seeking greater certainty at the same time that obtaining advance confirmation from HMRC can be difficult.
Figures obtained through Freedom of Information requests and reported alongside the real-estate compliance data show that HMRC rejected 41% of requests for advance confirmation of tax treatment during 2025/26. For Corporation Tax requests, the rejection rate was reported at 63%.
Those figures need context. Different statutory and non-statutory clearance regimes have their own eligibility criteria, and HMRC can decline to provide a view for several reasons. A rejected request does not mean HMRC considers the proposed transaction incorrect.
The commercial point is that some businesses can be forced to transact while their advisers have less advance certainty from HMRC than they would ideally prefer.
More Scrutiny, but Not Always More Certainty
BCLP says property groups are operating in an environment where HMRC is directing more resource towards detailed examination of transactions while businesses can also face difficulty obtaining definitive advance confirmation of the tax treatment they propose to use.
For finance teams, that makes flexibility and early professional coordination more important — particularly where the financing structure could need to change if the tax analysis develops.
HMRC's Own New Advance Tax Certainty Service Recognises the Link With Finance
The interaction between tax certainty and financing is also visible in HMRC's new Advance Tax Certainty Service for qualifying large investment projects.
HMRC's current guidance says clearance applications should disclose the commitment status of a project, including whether expenditure has been authorised and whether financing is in place. The service can cover areas including Corporation Tax, VAT and Stamp Duty Land Tax where the statutory conditions are met.
The service is designed for very large qualifying investment projects and will not apply to the majority of property transactions. Nevertheless, the guidance illustrates the practical reality: tax structure and financing cannot always be separated neatly when a material investment decision is being made.
What Should Property Companies Establish Before Lender Placement?
The appropriate level of preparation depends on the size and complexity of the transaction. A straightforward single-SPV refinancing does not require the same process as a multi-company acquisition involving overseas ownership and several layers of debt.
For material corporate cases, however, the finance file should establish several points before lenders devote substantial time to underwriting.
| Structure Question | Why It Matters to the Finance |
|---|---|
| Which entity is borrowing? | The lender's credit approval, KYC, facility agreement and security will be built around that entity. |
| Who ultimately owns it? | Ownership influences financial-crime checks, guarantees, credit assessment and potentially lender appetite. |
| How is the equity being introduced? | The lender may distinguish between permanent sponsor equity and repayable shareholder or intra-group debt. |
| Are shareholder loans required? | They may need to be subordinated or restricted while senior debt remains outstanding. |
| Which companies provide security? | A change in guarantor or security-provider structure can require fresh lender approval and documentation. |
| Are overseas entities involved? | Foreign ownership or lending can introduce additional legal, compliance and tax considerations. |
| Has the tax adviser confirmed the structure? | A provisional structure should be identified as such before a lender treats it as the basis for final credit approval. |
The Lender Does Not Need to Give Tax Advice
The fact that financing and tax structure need to be coordinated does not blur professional responsibilities.
The tax adviser determines the tax analysis. The solicitor advises on ownership, facility documentation, security and legal implementation. The lender determines whether it is prepared to provide the debt. The finance adviser coordinates the borrowing strategy and compares the lenders capable of supporting it.
Those roles are complementary precisely because each adviser should remain within their area of expertise.
A lender should not be expected to confirm that a proposed shareholder loan produces a particular tax treatment. Equally, a tax adviser should not need to determine which specialist lender will accept the final SPV, guarantee and security arrangements.
The valuable work happens at the boundary: making sure the structure designed by one professional can actually be implemented by the others.
Why This Matters More as Debt Sizes Increase
For a small transaction, changing lender late in the process can be inconvenient. On a £10m or £20m property facility, it can be substantially more disruptive.
Large corporate property lending frequently involves relationship or manual underwriting, bespoke credit papers, formal valuations, detailed legal due diligence and negotiated facility documentation. The lender's approval can also depend on leverage across several assets or guarantees from entities outside the immediate borrower.
Changing the structure late can therefore involve more than amending a company name on the mortgage offer.
The cost can include legal duplication, valuation delay, credit resubmission, missed acquisition dates, bridge extensions or lost negotiating leverage with a seller.
Early coordination is consequently not administrative tidiness. It is part of execution risk management.
Property Groups Should Distinguish Between Tax Efficiency and Financeability
A structure can make sense from one professional perspective without being optimal from another.
A tax adviser may identify a legally appropriate structure that achieves the client's commercial and tax objectives. A prospective lender can nevertheless decide that the borrower entity, jurisdiction, security or cash-flow arrangements fall outside its credit policy.
That does not make the professional advice wrong. It means the lending market has to be tested against the final structure rather than assuming that debt is universally portable between entities and ownership arrangements.
Tax Structure and Financeability Are Separate Tests
The professional advisers should determine whether a structure is appropriate from a tax and legal perspective.
The finance adviser should then establish which lenders will fund it, on what terms, and whether any lender requirement would force the structure to change.
What About Existing Property Groups Rather Than New Acquisitions?
The same principle applies to established portfolios. A family property company with assets accumulated over several decades can contain a mixture of personally held property, corporate SPVs, historic shareholder loans and debt arranged at different times.
A new refinance or succession-related reorganisation can expose the interaction between those arrangements.
For example, a group may want to refinance several properties into one larger facility while simultaneously changing the ownership or internal funding structure following professional advice. The most attractive lender economically may not accept the proposed group structure, while another lender may be comfortable with it but require different security.
That is where lender comparison needs to consider the complete structure, not merely a list of property values and mortgage balances.
Commercial Property Acquisitions Can Have Particularly Tight Timetables
Timing can make the coordination issue more acute in commercial property, where investors may be bidding through competitive processes or working to contractual completion dates.
A borrower might receive lender credit approval before the tax and legal structure has been fully settled because everyone is trying to preserve transaction speed. The risk is that the apparent time saving is reversed if the approved structure then needs to change.
The better approach is to identify the critical structural questions at the beginning. Not every point needs to be final on day one, but lenders should know where important elements remain provisional.
That allows the credit process to develop alongside the professional advice rather than pretending certainty exists where it does not.
What the HMRC Figures Should Not Be Used to Suggest
The £645m figure should not be used to imply that complex property structures are inherently suspicious, that shareholder loans are problematic or that HMRC is challenging every property finance transaction.
Large property groups naturally undertake substantial and complicated transactions, and HMRC's Large Business Directorate exists specifically to manage the tax affairs and compliance risks associated with major businesses.
HMRC's own definition also makes clear that tax under consideration is an enquiry-management estimate rather than an accusation or final tax assessment.
The useful lesson for borrowers is procedural rather than alarmist: if transactions and financing arrangements are receiving more scrutiny, the documentation and professional rationale supporting those structures need to be robust, and the finance should reflect the structure the client actually intends to use.
How Willow Private Finance Can Help
Willow Private Finance does not provide tax advice and should not be used as a substitute for specialist property tax accountants, tax lawyers or corporate solicitors.
Our role begins once the commercial transaction and professional advice start defining the funding requirement.
For larger property-company cases, we can assess which lenders will consider the proposed borrowing entity, ownership profile, property portfolio and security structure. Where several SPVs, shareholder loans, overseas shareholders or multiple properties are involved, that can mean comparing specialist banks, commercial lenders, private banks, development lenders or other structured-finance providers depending on the transaction.
Crucially, lender placement can be coordinated with the client's accountant, tax adviser and solicitor so that credit approval is being sought against the structure the professional team actually expects to complete.
The objective is simple: avoid spending weeks arranging finance for an entity and security structure that is likely to be redesigned before completion.
Financing a Property Company, Multi-SPV Acquisition or Group Refinance?
HMRC's latest figures are a reminder that complex property transactions increasingly require tax, legal and debt structures to be considered together.
Once your advisers have established the appropriate ownership and tax structure, Willow Private Finance can assess which lenders will fund it — including transactions involving multiple SPVs, shareholder debt, overseas ownership and substantial commercial or investment property.
Explore Complex Property Finance →Frequently Asked Questions
Key questions for property companies and professional advisers following the latest HMRC Large Business compliance figures.
Does the £645m figure mean property companies owe HMRC £645m?
No. HMRC defines tax under consideration as an estimate of the maximum potential additional tax liability attached to issues under investigation before the facts and law have been fully examined. The final liability can be lower or there may ultimately be no additional tax due.
Why can a tax structure affect property finance?
Tax advice can influence which company acquires or holds a property, how shareholder and intra-group loans are structured, where debt sits and which entities provide security or guarantees. If those elements change, a lender may need to reassess the borrower, security package and facility documentation.
Should tax advice be completed before approaching a property lender?
For a material corporate transaction, the tax and finance workstreams should usually be coordinated early. The structure may still evolve, but lenders should not be asked to approve an entity and security structure that professional advisers already expect to change.
Can Willow Private Finance advise on the tax treatment of a property structure?
No. Tax conclusions should be provided by the client's qualified tax advisers. Willow's role is to establish whether lenders can finance the structure advised by those professionals and to compare the available debt options.
Which property transactions most need coordinated tax and finance planning?
The need is particularly relevant where transactions involve several SPVs, shareholder or intra-group loans, overseas owners or lenders, material refinances, group restructurings, development projects or substantial commercial-property acquisitions.