Price over stamp duty threshold

James_Trimby

Hi there are loophole stamp duty savings schemes out there that would get you about £3300 back on the £5300 extra in your example. The costs would be that you would have to use a panel solicitor of the scheme which might cost a bit more than hunting around. Also, though they have worked well in the past, I would always say that the £3300 is a bonus when it is paid back to you and should not be put into your money plans. THe schemes that work for properties between £250k and £500k are, I believe only available through accountants within the PROBIZ network (above £500k other schemes are available). Agree the comments from morg-monster re EA fees and fix and fittings etc

Doozergirl

If the house and the plot are legally split into two titles, I wonder if it is possible to purchase them separately? I'm not sure as I have a feeling they might not like that either as they are right next door to each other.

Otherwise buy the house and rent the garden on a long lease?

G_M

Doozergirl wrote: »

If the house and the plot are legally split into two titles, I wonder if it is possible to purchase them separately? I'm not sure as I have a feeling they might not like that either as they are right next door to each other.

Otherwise buy the house and rent the garden on a long lease?

Who is 'they'? The Land Registry? The vendors? The neighbours? Why-ever should any of them care?

James_Trimby

Hi G_M the stamp duty forms ask about connected transactions and total values etc so unfortunately the Revenue care as does anyone professional filling in the forms! Suspect no one else will gives a damn But it's the Revenue that can fine!

G_M

James
The transactions are not legally connected.
You will have two quite separate contracts, one for each Title.

The fact that the two Titles were once combined (whether 1 month, 1 year or 100 years ago) is irrelevant.

James_Trimby

G-M These transactions would be linked it does not matter that the properties are registered seperately if same seller and same buyer (including connected parties) and the "deal" is for the two then they must be linked in calculating the rate of tax to pay.

It does not matter re the legality it is the reality of the situation that creates the problem and putting time between the two transactions is unlikely to help either. Further details on Inland Revenue website etc

Doozergirl

James_Trimby wrote: »

G-M These transactions would be linked it does not matter that the properties are registered seperately if same seller and same buyer (including connected parties) and the "deal" is for the two then they must be linked in calculating the rate of tax to pay.

It does not matter re the legality it is the reality of the situation that creates the problem and putting time between the two transactions is unlikely to help either. Further details on Inland Revenue website etc

That's exactly what I was thinking when I was talking about 'they'. I'm sure I'd read that about linked transactions but thought I'd chuck forward the idea just in case.

rach83

I have worked in the property industry for nearly 10 years. I remember reading an article written by a property lawyer some years ago on this very subject. Evading stamp duty in this way is fraud and HMRC do investigate such matters. Probably more so these days with less property transactions to keep track of. BEWARE!

The house does not sound like a good deal to me. Carving up a garden to create a building plot will have a detrimental affect on the value of the house and you will take the hit if you purchase the house at this level.

Fly_Baby

rach83 wrote: »

I have worked in the property industry for nearly 10 years. I remember reading an article written by a property lawyer some years ago on this very subject. Evading stamp duty in this way is fraud and HMRC do investigate such matters. Probably more so these days with less property transactions to keep track of. BEWARE!

It is all very nice of HMRC being so diligent about this. Maybe another thing for them to consider is that probably the OP is buying a £250K house not because they are very rich and want an expensive house but because that's the minimum they have to expect to pay for a decent house in their area. There is a difference when you can buy a £100K house but preferred a £250K, and when your choice starts at £250K due to local house prices.

Then maybe, over time, stamp duty will become indexed to reflect house prices in different parts of UK. It is really not fair to charge the extortionate stamp duties in areas where people just don't have a choice. LHA IS linked to local market prices after all - why isn't stamp duty?

Cannon_Fodder

splitting the deal doesn't help...

http://www.hmrc.gov.uk/sdlt/transaction/linked-transfers.htm

"There are some situations when two or more property transactions that involve the same buyer and seller are treated as being 'linked' for Stamp Duty Land Tax (SDLT) purposes. People connected to a buyer or seller can count as being the same buyer or seller.
If two or more transactions are treated as linked then the buyer must pay any SDLT due on the total value of all the linked transactions. This may mean that they have to pay a higher rate of SDLT than if the transactions had been treated individually."



http://www.hmrc.gov.uk/sdlt/transaction/value.htm

"Stamp Duty Land Tax (SDLT) may be payable when property or land is bought or transferred, whether the transaction involves payment of money and/or non-monetary consideration (which can include goods, services or the assumption of financial liabilities). The total value on which SDLT is payable is known as the ‘chargeable consideration’.
In a straightforward deal such as the cash purchase of a house, the chargeable consideration is simply the price paid for the property. Deciding what counts as the chargeable consideration can be more complicated for other transactions."


imo, Services = EA fees...which seems to be backed up by;

http://www.guardian.co.uk/money/2009/jul/01/stamp-duty-avoidance
"HMRC told me that however payment is made, paying the seller's estate agent fees means there is a "transfer of economic value from buyer to the seller" and this counts as part of the total amount of the transaction when calculating stamp duty."