Stamp duty avoidance

[pauldavies85]

I'm a bit straight laced but many financial types have saidvtherevare legal technicalities to reduce your stamp duty.

Does anybody know of this? How does it work?
Potential purchase is around 400k, stamp duty over 11k, what would likely reduction be?

Self employed so anything that would encourage hmrc to pick on me is not welcome!

[Sarnie]

I think most of the loop holes have been closed now

[Birkin1932]

It was closed in the last budget and to be honest a 400k purchase would not be worth it, it was mainly houses £2m plus

Also to save 11k is not worth the risk

[pauldavies85]

These were my thoughts! Just a bit alarming how quickly this was mentioned to me! Needless to say I haven't spoken to them since and seeked a friendly ph advisor!

[okgo]

I was wondering this too.

So it it a case of you just pay it now? Can it be lumped in with the mortgage or does it have to be paid in full out of your deposit?

[baptistsan]

Anyone else think the way it works is a complete con?

Am sure the house price could be manipulated to your advantage, no?

[Sarnie]

okgo said:

I was wondering this too.

So it it a case of you just pay it now? Can it be lumped in with the mortgage or does it have to be paid in full out of your deposit?

It has to be paid, in full, on completion of the mortgage.

It's entirely separate and in addition to your deposit.

[Sarnie]

baptistsan said:

Anyone else think the way it works is a complete con?

Am sure the house price could be manipulated to your advantage, no?

HMRC are very much aware of 'under market value' transactions........

[wattsm666]

There are still schemes available, but house price needs to be more.

[ringram]

Yeah we were offered a deal to zero stamp duty pretty blatantly mid year. "cost" was 2/3 of stamp duty, so we would have saved sweet FA for the risk. Told them to forget it, paid in full and slept easy.

Terms basically said their liability was only to the amount of the fee. Nothing more. Ours of course would have been whatever HMRC wanted to rape from us as well as much fisting over the rest of our tax affairs and all other manner of bks.

Not worth it IMO.

[eliot]

As others say, not worth it on 400k. Had a few glasses of red to recall the details of how it works, but essentially never complete therefore don't pay stamp. The revenue know what you have done and you remain on their radar forever afterwards. Which means if you are pulling any other stunts they are very much more likely to investigate you or pay attention to every detail of your affairs.
and iirc if the current owner has pulled the same avoidance trick, you can't do the same.

[anonymous-user]

negotiate hard with buyer, get £5k off asking price and you are ahead of where you would be with the avoidance scheme

and you won't have to worry about hmrc coming after you for the £11k in due course and any potential problems when you come to sell again

[princeperch]

I would have thought that with property being sold for £X millions the SDLT avoidance people would have obtained (in the old days) some sort of letter of comfort from HMRC to confirm that the structure of the proposed transaction would not attract any liability under the proposed circumstances.

[princeperch]

eliot said:

As others say, not worth it on 400k. Had a few glasses of red to recall the details of how it works, but essentially never complete therefore don't pay stamp. The revenue know what you have done and you remain on their radar forever afterwards. Which means if you are pulling any other stunts they are very much more likely to investigate you or pay attention to every detail of your affairs.
and iirc if the current owner has pulled the same avoidance trick, you can't do the same.

that sounds ludicrous. you would be hard pushed to find a solicitor to do to the deal for you and your lender (assuming you would be mortgaging it) would probably like to know their charge has been registered over their security within the required timescale. no SDLT certificate, no registration at HMLR.

the proper SDLT reduction/avoidance schemes involve setting up an SPV to buy the property.

[Terminator X]

The lawyers handle stamp duty and always play it with a straight bat in my experience. Distasteful tax though imho.

TX.

[pauldavies85]

It's really a case of interest as it is so readily mentioned by financial advisors/brokers to me.

I think the trueth in this country is if you've got enough you can get around anything, look at all the billionairs we look after!

[richarda0109]

The 2 ways are:

(1) Can you split the property into 2 (house + land, separate land)
(2) Are there any moveable fixtures that you are buying with the house. These can be deducted from stamp.

I know the second usually isnt a lot but everything helps.

Rgds
Richard

[Adam B]

Sarnie said:

I think most of the loop holes have been closed now

Really? I know they closed the one whereby an offshore company bought the house on your behalf.

So why am I being pitched a scheme that I am told has been approved by HMRC and is perfectly legal? I am going to hear what they have to say with my sceptic-tinted specs on, but their fee was 2% of the duty saved. The purchase price is 950k so a £40k saving is not to be sniffed at.

Anyone been pitched this recently and can confirm how it works?

[Adam B]

15 people in a room for an hour, plus some well-rehearsed form filling

If half sign up that is a pretty good fee

But yes I did check it was 2% of the saving not the house price

[Adam B]

Having had a further conversation surprise surprise the estate agent was talking BS and it is 2% of the property

Ie I save 20k they make 20k

I didn't get the full details but it involves putting property into a trust for 124 years but you can close it at any time, eg on sale of property, and the exchange is not seen as a completion by HMRC.

I will google to find out any downsides if these schemes, another than the rip off fee