Stamp duty land tax

bargainchaser_2

I would like to swap houses with my parents. Is there anyway we can reduce the amount of stamp duty land tax paid ? I am told the stamp duty land tax is governed by the market value. Who decides the market value ? For instance a quick sale attracts a lesser price. What governs the minimum price i could "sell" the house for?

Thanks...

Robert_Sterling

This loop hole was removed by the STAMP DUTY LAND TAX ( SDLT ) 2003.

Read all about it here

clutton_2

if neither of you has a mortgage, surely you can sell each others house to the other for whatever price you choose - thus avoiding SDLT. IF you have a mortgage which is less than SDLT, then sell if for an amount which will pay off the mortgage, but which is still less than SDLT threshold.

silvercar

The IR will expect SDLT to be paid at market value if you are exchanging between family members. You will no doubt get a solicitor in to do the legals who will not want to be party to any dodgy figures.

JG_Gardner

My mother asked me to post the following tip as she didn't know how to. You might want to check whether it's relevant to you.

To: Martin's Money Tips
Subject: ,Stamp duty Land Tax - disadvantaged Areas

Dear Martin,

We are grateful to you for your helpful advice. Keep it up!

Here's another tip to share: We have just purchased a house for £145,000. Having paid the land tax to our solicitor, we fortunately decided to check the council tax band, and in the process also checked the land tax. We noted that certain areas labeled "disadvantaged" have a higher level before any tax is due, i.e £150k instead of £125k. We decided to check our postcode and to our surprise and delight found that we did indeed qualify, and so have saved £1,450!! When we rang the local estate agency, the girl who was dealing with the sale knew nothing about this!! Nor did our solicitor. As this all has to be dealt with within 30 days of the purchase we might well have paid £1,450 unnecessarily. There are some 2000 postcodes where this applies, mainly in the north and midlands. So this could help someone else.

Best wishes, Amelia Gardner

Jorgan_2

Just to add to Amelia's post, if you have paid SDLT and you were in a disadvantaged area (less than £150k) you can claim it back, with interest, from the IR. I did.

Also the web sites don't recognise all the post codes, when I rang the IR, they said my postcode wasn't in a recognised area so I had to pay it. However the site agent was adamant that the property was exempt & if it hadn't been for her I wouldn't have put in a claim. It apparently goes on the electoral ward that the property is in.