Avoiding Stamp Duty.. anyone know about this...

p00hsticks

huntersc wrote: »

Why are SDLT planning options being posted on a public forum like this? Crazy. Everyone knows that you can avoid SDLT, everyone knows there's a loophole, everyone knows this particular exchange/completion alteration loophole will only last until it's made public and the govt has to take action against it. So let's keep it under your hat and let the solicitors do the work and let us take advantage of it while it's possible.

As the particular loophole mentioned in the original post was used by the Labour Party themselves to avoid SDLT, I think that they're already well aware of it - the link that I posted was to an article published in a national newspaper.

Ditto the other one I mentioned about buying fixtures and fittings separately. This is well documented and has been going on for decades - HMRC and successive governments know all about it and have done for years.

Like G_M says, not everyone is aware of these loopholes, ( I myself wasn't aware of the company one until this thread), but trust me - the government and HMRC are well aware of them and making out that they're some great secret to be kept under wraps and not mentioned here is (IMHO) just plain wrong...

dfarry

maninthestreet wrote: »

dfarry,

Can you name the solicitors/conveyancers that sent you the email?

I'll pm it to you.

Also I have had the following email... the scheme is not organised by the solicitor/conveyancer... it is a different company. (I haven't bothered to do much looking into them yet). It doesn't say how the scheme works, just what services they can provide and the basis for them..

Dear Mr xxxxxxxx

Following on from our telephone conversation I am delighted to get back to you about the Stamp Duty Land Tax planning which we have been implementing in various forms for a number of years.

Please find below and attached some information about the planning which will hopefully be of interest. In summary, the fee charged to the client for the planning is 2% plus VAT on cases of £500k and above / in the 4% band, so the easiest way to position it is that if the client is involved in a purchase at £1mln, if he or she did nothing they would pay the Treasury £40,000. If they elected to run our planning they would pay us a fee of £20,000 plus VAT resulting in a net saving to them of £17,000. At the point of completion the 4% SDLT would be paid into the solicitor's client account in the normal way. Our advising solicitor would then complete the SDLT1 return and upon receipt of the SDLT5 from the stamp office, the rebate of £17,000 would be paid to the client from the solicitor's client account. For purchases below £500k the fee is 1.5% plus VAT.

In terms of your purchase at £280,000 the net rebate to you would be £3,570.00 which would be paid to you no later than 3 weeks after completion. If you decide to go-ahead with the planning, we would strongly recommend that you use one of our panel solicitors, of which xxxxxxxxxxx Solicitors is one, as they will ensure that the tax planning is seamlessly incorporated into the conveyancing cycle without delaying the transaction at all.

Also attached is the letter of instruction you will need to sign and complete in order to formally instruct us in the matter of the tax planning. Once completed, this should be returned to me either via fax to xxxxxxxxxxxxxxx or via e-mail to this address.

In the meantime I can confirm that the planning is supported by one of the country's leading legal counsel and is disclosed to HMRC and has thus been allocated a corresponding scheme disclosure number. Our principal channel to market is via accountants as you may know. Attached is a letter from 2020 Group, the largest association of Accountancy firms in Europe, endorsing the planning. This letter talks about xxxxxxxxxxxx which is our property investment and trading business via which we used to run the planning before deciding to incorporate a new company specifically for this purpose, namely xxxxxxxxxxxxx Ltd.

I have also taken the liberty of attaching an interesting article from the Independent newspaper about the Labour Party's use of SDLT planning which saved them £210,000 in stamp duty land tax.


Highlights of the Planning


1). The SDLT strategy has been running for over 4 years.

2). In excess of 1000 cases have been successfully completed.

3). The planning is backed by a robust Counsel's Opinion given by a leading Tax Counsel from Lincolns Inn Tax Chambers.

4). The planning has been disclosed to HMRC and has a corresponding scheme disclosure number ensuring that it is fully compliant with HMRC requirements for tax planning.

5). The structure has been queried on only a few occasions by the Inland Revenue who were promptly and easily satisfied that there is a legal loophole for reducing stamp duty.

6). The strategy is currently being marketed via 1500 firms of Chartered Accountants comprising the membership of the 2020 Group, the board of which ran the planning themselves as part of their process of due diligence in respect of their own commercial purchase.

7). The structure will save property buyers in the region of 50% of the SDLT. The total fee to the client is 2% plus VAT which includes SDLT and any associated fees apart from conveyancing.

8). So confident are we of the scheme's integrity that we offer a 'no-win-no-fee' undertaking, via which all fees are fully refunded to the client in the event of a successful challenge by HMRC.

9). As well as the Chartered Accountancy Networks, the planning is used by Estate Agents, House Builders, Land Buyers, Property Lawyers, Commercial Conveyancers and others to enable their clients to mitigate stamp duty.

10). The scheme is deemed to be low risk and non-aggressive and does not involve either the vendor or the lending institution involved in the transaction or effect either their title, security or ability to realise funds from the sale of the property.

11). References are available, on a confidential basis, from individuals who have successfully run the planning and from Chartered Accountancy firms who have referred clients and who, based on the results, continue to refer clients.

12). Experienced panel solicitors are on hand to ensure the seamless implementation of the planning and conveyancing at a very cost effective rate.

13). The planning has been run in conjunction with a variety of lenders in the UK and was approved by a major UK prime bank late 2006.

I hope this information proves to be of interest. Please call me if you have any questions and I look forward to speaking to you again in due course.

Best regards

Well it all sounds very convincing... I'm just a bit concerned that 5 months down the line HRMC come knocking for the full amount... I then incur further legal costs and worst case scenario what happens if the company now holding the "saved" 1.5% +vat amount goes bust for example.

I'm just very wary... it does sound too good to be true (so it probably is??) I really need to speak to someone independent and is able to give me a better idea of what is going on here.... I really could do with saving some of the stamp duty money though.

huntersc

p00hsticks wrote: »

As the particular loophole mentioned in the original post was used by the Labour Party themselves to avoid SDLT, I think that they're already well aware of it - the link that I posted was to an article published in a national newspaper.

Ditto the other one I mentioned about buying fixtures and fittings separately. This is well documented and has been going on for decades - HMRC and successive governments know all about it and have done for years.

Like G_M says, not everyone is aware of these loopholes, ( I myself wasn't aware of the company one until this thread), but trust me - the government and HMRC are well aware of them and making out that they're some great secret to be kept under wraps and not mentioned here is (IMHO) just plain wrong...

Very few are aware of the loopholes. Yes the HMRC knows what's happening and right now they can ignore it. The moment tens of thousands of people on a forum like this find out and then spread it to thousands more they will need to do something about it. My suggestion is to keep it under wraps and take advantage rather than shout it at the world.