Stamp duty mitigation scheme - is it for real?

GDB2222

DarrenTMH wrote: »

Hi all

there is an existing thread on this subject, it's almost 4 years old now and 3 pages long. I posted a comment on page 3 which is pretty comprehensive on the subject which may be of interest to you. You can find it by clicking on my pic and looking at my previous posts in the 'statistics' tab.

best regards

Darren, are most of the SDLT schemes as expensive as this? I've seen tax mitigation schemes in the past where the fees were up to 20% of the tax saving - most were less. Here, we are looking at nearly 60% (including VAT), which seems wildly excessive to me.

jockosjungle

A scheme disclosed to HMRC is just that, they've told them about it. It'll then be fore lawyers and tribunals to decide if it works or not. You may get lucky and it works and you'll save £1500.

If it doesn't you'll pay the tax you owe plus interest. You will also receive a penalty based on a percentage of the tax owed. Since you have used a marketed avoidance scheme, you cannot claim you made a simple mistake, you intentionally tried to avoid tax. You can look up the tax penalties yourself and they changed recently, you'll be looking at the minimum of a deliberate error which might be around 50%.

Depends on how confident you are the scheme works

R

mrmasters

we have just had a similar conversation with an estate agents in-house financial advisor who offered us this service (so long as we use an appropriate solicitor).
comes to down to paying them 1.5% of purchase price + vat (property value 495000). we then get back the remainder of the SDLT.

Have since spent the evening searching all I can on it!
We were given a sample letter of engagement and the killer is in the client declaration at the bottom:

"we/i understand that in the course of executing the planning a company will be set up in my/our name/s as a vehicle for the purchase....."

Luckily, Father-in-law is a chartered accountant and FD - and used to be a partner in a major accountancy firm. He is going to run the details past his old firm for advice.

But I suspect it really is an avoid-with-a-bargepole scheme....

Oakman

I've just received a letter from the IR demanding nearly £9K, for a purchase that completed in October 2009.

I'm not sure what to do to be honest....

nobblyned

Oakman wrote: »

I've just received a letter from the IR demanding nearly £9K, for a purchase that completed in October 2009.

I'm not sure what to do to be honest....

Ha ha ha ha ha!

Magrah

Oakman wrote: »

I've just received a letter from the IR demanding nearly £9K, for a purchase that completed in October 2009.

I'm not sure what to do to be honest....

Snap! Well £13.5K, i've contacted the co that operated the scheme and they are going to call me back. Suggest you do the same. Looking back at the paperwork and speaking to some poeple it seems the key point is did they cover you if HMRC enquired within 9 months only. In our situations its beyond 9 months so they have issued a discovery assessments as they are out of time.

GDB2222

Oakman wrote: »

I've just received a letter from the IR demanding nearly £9K, for a purchase that completed in October 2009.

I'm not sure what to do to be honest....

Pay the £9k or pay a lot of money to contest it with no certainty you'll be successful. You could talk to the people who peddled the scheme to see whether there is a group of people in the same position as you who could band together to share costs.

Hopefully, you set aside the SDLT money in 2009 on the basis that these schemes are certainly not bulletproof? Are HMRC charging a lot of penalties on top?

CloudCuckooLand

Not quite clear if just income tax...but who is willing to risk the HMRC on their backs for 5 years..?

http://www.bbc.co.uk/news/business-12544069

"Tax dodgers face far greater scrutiny of their affairs under a new HM Revenue & Customs (HMRC) plan."

"The Revenue says anyone who evades tax will have their financial affairs watched closely for up to five years to make sure they do not re-offend."
"The plan is called the Managing Deliberate Defaulters (MDD) scheme."

"Where the tax loss is over £5,000, HMRC will send a letter to businesses in the MDD programme requiring additional information to be submitted along with their tax returns for the following five years,

FTBFun

Oakman wrote: »

I've just received a letter from the IR demanding nearly £9K, for a purchase that completed in October 2009.

I'm not sure what to do to be honest....

Now there's a surprise. I'm afraid you're going to have to pay the tax over - best to do it asap.

This is what happens when you use a bunch of unqualified cowboys to put this crap through.

Any comments DarrenTMH?

Magrah

It may not be £9k (or £13.5k in my case) as these schemes come with a caveat to say they will refund the fees if the scheme fails. The question is though if that repayment is in relation to the 9 months (HMRC's normal enquiry window) or 6 years (HMRC window to issue a discovery assessment). My scheme, not sure not read the small print yet.

Agreed in any event you cannot take on HMRC on your own.

HMRC did advise that they would be attacking these schemes in December last year. Must confess as my purchase was November 2009 thought I had escaped. Ah well, shockingly there are still a multitude of people offering these schemes.