Stamp duty mitigation scheme - is it for real?

AndyJ52

Whilst I agree that these schemes are to be avoided..... is it possible that the banding system for Stamp Duty has failed to keep up with house price inflation? Not an assertion.... just a question!
Maybe people feel that this tax has now become punitive and hence the attempts to get around it.

GDB2222

AndyJ52 wrote: »

Whilst I agree that these schemes are to be avoided..... is it possible that the banding system for Stamp Duty has failed to keep up with house price inflation? Not an assertion.... just a question!
Maybe people feel that this tax has now become punitive and hence the attempts to get around it.

I do understand that. In London, there are many roads where houses go for £1m+ and quite a few roads where houses routinely go for say £5m. That will soon mean £250k in stamp duty, which is no joke even for people who can afford to spend £5m on a house. I am sure that this is a deliberate policy by the chancellor:
a) It brings in loads of money
b) It will tend to limit house price inflation, as this money is drained out of the system and turnover is reduced.

On a personal note, I think that far too much money is going into housing and not enough into productive assets (like factories). Hiking stamp duty still more would ironically probably make property more affordable for FTBs by reducing prices generally.

sunshinetours

AndyJ52 wrote: »

Whilst I agree that these schemes are to be avoided..... is it possible that the banding system for Stamp Duty has failed to keep up with house price inflation? Not an assertion.... just a question!
Maybe people feel that this tax has now become punitive and hence the attempts to get around it.

It may not be an assertion by you but it should be!
Fiscal drag as this policy of leaving tax bandings and reliefs at historical values, was a major part of the last Labour governments tax policy. There are numerous exaamples of it

Not getting political here but those are the facts. however saying all that, clearly that would never be a reason still to fraudulently avoid tax

mynameisdave

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....

Man up and pay what you owe?

Oakman

timmyt wrote: »

sorry chaps, but they dont work - www.hmrc.gov.uk/budget2009/dotas-sdlt-1000.pdf

Hi, thanks for the link but it appears to be a draft/consultation document and refers to properties worth over £1 Million.

Rhino666

Hi

Thanks for a great thread on this subject. In particular I hope that Magrah & Oakman walk away from this with dignity.

There is no immorality associated with a wish to avoid paying stamp duty. This tax should have clear thresholds rather than hitting a huge tax increase at £250k. If it were reasonably(morally) applied, less people would be inclined to try and avoid it !!

I despair of the 'you are immoral for attempting to avoid tax and deserve everything you get' brigade - they have to be mislead at best and likely hypocritical as well. If this country were run morally, most of us including government, banks, lawyers etc would have to seriously rethink strategy.

We live in a society that is far from pefect, so trying to take legitimate steps to mitigate against tax, especially such an unfairly applied one is thoroughly understandable. The problem here is the stress of an appeal and more importantly being highlighted to HMRC.

sunshinetours

Rhino666 wrote: »

Hi
There is no immorality associated with a wish to avoid paying stamp duty. This tax should have clear thresholds rather than hitting a huge tax increase at £250k. If it were reasonably(morally) applied, less people would be inclined to try and avoid it !!


We live in a society that is far from pefect, so trying to take legitimate steps to mitigate against tax, especially such an unfairly applied one is thoroughly understandable. The problem here is the stress of an appeal and more importantly being highlighted to HMRC.

The bits highlighted I agree with in principle and indeed spend a chunk of my life doing legitimate planning for people however when you get into grey artifical schemes purely created to avoid (arguably evade) tax I don't think people should start with the morality argument.

The stress of an investigation and appeal comes with the territory and if in doubt you don't attempt to achieve savings / avoid a tax that forms for most people in these circumstancea maybe a saving of 1.5% of the purchase price of the biggest asset you ever buy.

If you don't agree with the bandings then write to your MP and lobby them to get tax law changed. Tiered bandings a bit like income tax would be much fairer and remove the £250k and £500k anomalies that the market suffers