Paying for fixtures and fittings to avoid stamp duty

DarrenTMH

Hello, there is another method available through which you can reduce your SDLT costs on a purchase price of £520k by over £10,000 - this method is known as SDLT Avoidance or SDLT Planning

I posted the details of this in another thread on this forum on this subject but I don't have the facility to post a link so I'll repost the content here for you:

With the rules of this forum (advertising & self promotion) in mind, some info/disclosure on me first:

• I have a financial interest in completing SDLT planning for my clients.
• I am real! I'm not an alias, a pseudonym or a troll - searches on my company name (which I have not disclosed here but just in case any detectives find it), my forum name and my real name will bring up loads of relevant results in any search engines.

I'm not sure how to get past the fact that my ability to post the following information comes directly from my commercial activity in this area, a fact that some would say prohibits me from posting on the subject as to do so would be deemed advertising, yet to observe this view and choose not to post would deny the OP and others in the thread the benefit of the information I have available to share and which is entirely relevant to the OP.

So in sharing this information I'll request that even if after reading it you decide that SDLT planning is something you'd like to undertake, please don't seek me out and ask me to provide SDLT planning services for you, as to do so would validate any post by me on the subject as a form of advertising thereby placing me in breach of the forum rules.

So, here's a bunch of info on SDLT Planning from my own involvement in this area that I think will be of interest to you:

Is it legal?

Well, it depends on the method used. I've come across plenty of dodgy schemes which in my opinion are a fine waiting to happen if not worse. By contrast, there are plenty of schemes (we have 13 different schemes) which have been carefully constructed with the benefit of time, experience and considerable expense to be effective within the boundaries of the law.

Tax evasion is the term which describes evading the payment of taxes which you are liable to pay. If you are caught undertaking tax evasion you will face fines and/or imprisonment.

Tax avoidance the term which describes the use of any legal method to pay less in tax than might otherwise be the case. Tax avoidance is perfectly legal (the clue is in the description), but there can occasionally be confusion between this term and the non-legal tax evasion which has given rise to yet another phrase:

Tax planning - just another name for tax avoidance, increasingly used to prevent potential confusion with tax evasion.

Tax avoidance/planning has been long established as legitimate in UK law, Lord Tomlin stated in the case of IRC vs Duke of Westminster (1936) 19 TC 490 - every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be.

If a SDLT planning scheme has the support of leading and respected Counsel and has been notified to and pre-approved by HMRC (as our schemes have) then one may quite rightly rely upon these aspects to gain a significant degree of comfort in it's use.

Our schemes' supporting counsel are highly respected, experienced and knowledgeable barristers who have been instrumental in the formulation of our schemes and their ongoing development as the tax laws continue to develop, and they are retained by us in this capacity as well as to defend any enquiry resulting from the use of these schemes.

Key Points on valid schemes

Schemes such as ours will benefit from the following key points, which you should look for in any scheme you may consider:

• No up-front fees - All fees are paid on successful completion of the case and certification received from Stamp Office at HMRC
• No-win-no-fee basis - No fee is payable if the purchase does not conclude
• You may use your own conveyancing solicitor provided they consent to and support your use of SDLT planning
• All monies are handled by the conveyancing solicitor
• No liaison with vendor’s solicitors is necessary
• There is no deterioration in the Lenders’ position
• Schemes notified HMRC and disclosed as used on multiple occasions without enquiry
• 3,000+ cases processed and notified with no queries
• Schemes have Positive Counsel Opinion and support
• You may leave your SDLT funds (comprising our fees and your savings) in your conveyancing solicitor's client account bearing interest for your benefit exclusively until you are comfortable to instruct withdrawal of your savings and payment of fees

I hope you find this information useful

best regards

Darren Ferneyhough

Bananamana

taken from the HMRC website

Tax planning to be wary of

• It sounds too good to be true.
• Artificial or contrived arrangements are involved.
• It seems very complex given what you want to do.
• There are guaranteed returns with apparently no risk.
• There are secrecy or confidentiality agreements.
• Upfront fees are payable or the arrangement is on a no win/ no fee basis.
• The scheme is said to be vetted by a top lawyer or accountant but no details of their opinion are provided.
• The scheme is said to be approved by HMRC (it does not follow that this is true).
• Taxation of income is delayed or tax deductions accelerated.
• Tax benefits are disproportionate to the commercial activity.
• Off-shore companies or trusts are involved for no sound commercial reason.
• A tax haven or banking secrecy country is involved without any sound commercial reason.
• Tax exempt entities, such as pension funds, are involved inappropriately.
• It contains exit arrangements designed to sidestep tax consequences.
• It involves money going in a circle back to where it started.
• Low risk loans to be paid off by future earnings are involved.
• The scheme promoter lends the funding needed.

one more point - just remember - its YOU who is personally liable if you do opt for one of these schemes.

bOingball

Also from the same Tax Website - http://www.hmrc.gov.uk/avoidance/spotlights.htm

Spotlight 10: Stamp Duty Land Tax avoidance (7 June 2010)
Commercial and residential property sales are being carried out in ways intended to avoid Stamp Duty Land Tax (SDLT) by reducing the purchase price below the SDLT band or threshold. In some cases an intermediate sale, often on the same day, is introduced into the arrangements with the sole intention of removing the true purchase price from tax. These arrangements seek to exploit 'sub sale relief'. This relief is intended to ensure that, where a property transaction happens in stages, SDLT is paid once on the full amount paid for the property by the person who ultimately acquires it and no double charge arises.

Our view is that these contrived transactions, including those involving sub sales, produce a charge to SDLT on the full amount paid for the property. In some cases there is doubt about whether transactions actually meet the conditions for the sub sale relief. Even if they do, anti-avoidance legislation effective from December 2006 counters any arrangements seeking to depress or avoid the tax on the full amount paid for the property, including those seeking to exploit sub sale relief.

Where HMRC find property sale arrangements that have been artificially structured to avoid paying the correct amount of SDLT these will be actively challenged, through the courts where appropriate.

mynameisdave

DarrenTMH wrote: »

my forum name and my real name will bring up loads of relevant results in any search engines.

DarrenTMH wrote: »

I have not disclosed here but just in case any detectives find it)

Fingers crossed the detectives don't know what http://www.google.co.uk is or they might find your real name and company.

Ooops, sorry. I've let the cat out the bag.

bitsandpieces

To quote from another forum about 'pre-approval':
"Promoters often refer to HMRC having issued a scheme number and "approving" that the scheme works [but] the fact that a scheme number has been issued merely confirms that the scheme has been disclosed...and has nothing to with whether or not the scheme works." http://www.taxationweb.co.uk/forum/sdlt-mitigation-scheme-t28510.html#p107327

There is also a real risk involved with this. HMRC can pursue you a long time after the transaction takes place - and you could land up with interest + fine + SDLT to pay, all after you've also paid this tax avoidance company their big fee. Even if avoidance scheme does hold up in court the process whereby HMRC pursue the money and you eventually find would be pretty horrible. While companies selling these schemes emphasise their safety, will they indemnify you against the massive losses you could face?

Discussed in more depth on this thread https://forums.moneysavingexpert.com/discussion/2551967 I wouldn't touch this type of scheme with a bargepole glued onto another bargepole, personally.

DarrenTMH

Good to see some involvement and discussion here on this subject, here's some more from me resulting from the latest posts:

Google
the deliberate omission of my company name was not a challenge, a dare or an exercise in secrecy, merely an attempt to comply with the forum rules which prohibit advertising & self promotion.

approval
HMRC do not approve any tax avoidance schemes

risks
tax planning exists because of the potential reward but no method is entirely without risk, however if the maximum risk involved is simply the payment of the tax then the maximum downside is zero and the maximum upside is significant - each taxpayer needs to weigh up the upsides and downsides for themselves and make their decisions accordingly.

upfront fees
some firms charge these, as noted by HMRC it would seem wise to view these with caution

no win no fee arrangement
does it get any better than this? paying for results only and paying nothing for no results seems like a pretty good deal for any business arrangement, compared to potentially getting no result and still having a large bill to pay for your trouble.

I hope these additional notes are helpful to the discussion

best regards

Darren Ferneyhough

bitsandpieces

DarrenTMH wrote: »

approval
HMRC do not approve any tax avoidance schemes

OK. But it's important to avoid confusion, given that your previous post says that people should look for "Schemes notified to & pre-approved by HMRC".

tax planning exists because of the potential reward but no method is entirely without risk, however if the maximum risk involved is simply the payment of the tax then the maximum downside is zero and the maximum upside is significant - each taxpayer needs to weigh up the upsides and downsides for themselves and make their decisions accordingly.

But SDLT avoidance schemes have a max risk beyond the tax avoided, don't they? HMRC may look to charge those using these schemes interest on the tax not paid or land them with a big fine (not to mention the pain of fighting this kind of case with HMRC).

no win no fee arrangement
does it get any better than this? paying for results only and paying nothing for no results seems like a pretty good deal for any business arrangement, compared to potentially getting no result and still having a large bill to pay for your trouble.

But it will be a looong time before you can know whether HMRC will chase this. Will the scheme's users and suppliers wait out this time before any fees are settled? If anything is paid sooner, there's a risk of being landed with paying tax + fees + anything else HMRC can land you with.

mynameisdave

I used google, as you suggested...

I searched your username.

Why do you have to pepper every internet forum under the sun to drum up business? Word of mouth of success not pulling in enough cash?

Bananamana

DarrenTMH wrote: »

Key Points on valid schemes Schemes notified to & pre-approved by HMRC

DarrenTMH wrote: »

approval
HMRC do not approve any tax avoidance schemes

wait a second....

Also the penalty would be with interest AND by that time you would have taken your fee (which appears to be 8k based on a quick quote on your website for a purchase at 500k)

jockosjungle

Yes there would definitely be a penalty, and a hefty one for purposefully avoiding tax

R