Chancellor's newly announced Stamp Duty Holiday
Discussion
The Chancellor has today announced the stamp duty holiday for house purchases under £500,000. The full details haven't yet been published but I am interested to understand:
1. If I transfer my Buy To Lets from my own name into a company, will the company have to pay Stamp Duty under the new rules? I am thinking that each property is below £500,000 and I could buy them into the company under individual contracts with different completion dates so they weren't treated as a single transaction at a higher value.
2. Is the 3% surcharge that applies to companies and second homes still going to apply following this announcement. I expect it probably will.
I am mindful that I will trigger a CGT event by selling to a company but this might be the best time to bite the bullet and get it done.
1. If I transfer my Buy To Lets from my own name into a company, will the company have to pay Stamp Duty under the new rules? I am thinking that each property is below £500,000 and I could buy them into the company under individual contracts with different completion dates so they weren't treated as a single transaction at a higher value.
2. Is the 3% surcharge that applies to companies and second homes still going to apply following this announcement. I expect it probably will.
I am mindful that I will trigger a CGT event by selling to a company but this might be the best time to bite the bullet and get it done.
https://www.gov.uk/guidance/stamp-duty-land-tax-te...
London GT3 - "Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge."
"The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021."
London GT3 - "Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge."
"The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021."
I think we'll have to wait for the small print. The announcement certainly didn't give much detail.
Generally speaking, splitting a project into a series of smaller transactions doesn't work for tax avoidance, including Stamp Duty. The reporting that's required after property transactions makes this quite easy for HMRC to spot. So far as I am aware an SDLT1 (Stamp Duty) form has to be completed for every transaction whether or not any tax is payable. HMRC's big computer in the sky will see a series of similar transactions between the same parties and is likely to sound an alert. I'd suggest expert advice be obtained before moving a portfolio one piece at a time.
Generally speaking, splitting a project into a series of smaller transactions doesn't work for tax avoidance, including Stamp Duty. The reporting that's required after property transactions makes this quite easy for HMRC to spot. So far as I am aware an SDLT1 (Stamp Duty) form has to be completed for every transaction whether or not any tax is payable. HMRC's big computer in the sky will see a series of similar transactions between the same parties and is likely to sound an alert. I'd suggest expert advice be obtained before moving a portfolio one piece at a time.
rockin said:
HMRC's big computer in the sky will see a series of similar transactions between the same parties and is likely to sound an alert. I'd suggest expert advice be obtained before moving a portfolio one piece at a time.
How many ply does the computer look? I'm wondering about a series of "triangular" trades, with a different third party each time.xeny said:
How many ply does the computer look? I'm wondering about a series of "triangular" trades, with a different third party each time.
I don't know the answer to your question and recommend you seek professional paid-for and insured advice. It's not worth the risk of finding yourself on the wrong end of a difficult conversation with HMRC.
Intellectual curiosity only - I don't do property.JPJPJP said:
https://www.gov.uk/guidance/stamp-duty-land-tax-te...
London GT3 - "Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge."
"The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021."
Thank you. Most helpful. London GT3 - "Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge."
"The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021."
It’s definitely driving some interest in the market at present with a property we were going to see today already in receipt of multiple offers, including at least one over asking price. Helps flow of cash but the overall economy still looks pretty gloomy. People who bought between the market reopening and now can’t be best pleased...
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