Avoiding stamp duty?

Cissi

Hmm, spam brought up yet again by another new poster? Wonder if business is slow, perhaps?

timmyt

The Revenue have been very clear - for over a decade now - that only land and those items forming part of the land/property attract SDLT.

If they can properly be taken away and would not normally be viewed as part and parcel of the property/land then you can avoid SDLT on their value.

They say
" ......those items must be valued at a rate reflecting their fair market value. For example, if carpets are included in the sale of a flat, the purchaser and vendor must agree a fair price which reflects their age and quality. This is then subtracted from the price paid to find the chargeable consideration...to SDLT."

However, if you overvalue them, then you are committing a fraud on the Inland Revenue and criminal sanctions are imposed on:
- you as seller
- you as buyer
- both sides lawyers
- the Estate Agents

Fine and imprisonment.

NASTY.

The Revenue give examples of what you can value and what you cannot.....includes :

• buildings and structures that are part of the land, such as farm buildings
• fixtures and fittings, including bathroom and kitchen fittings, but not freestanding furniture, carpets or curtains

It also includes the estimated value of any undertaking to carry out work or services, such as a promise from the vendor to carry out repairs to the property. Bet many lawyers forget this!

So, you think you will buy for £250k and then value items at £10k or £15k, think very carefully, as most people do not have ebay valued items in their house amounting to that.

protheroejones

To clarify any misunderstanding...

It is true that there are legimate and legal strategies available for the mitigation of 100% SDLT.

It is available for residential or commercial properties, whether freehold or leasehold, but only on property being purchased above £500k.

Typical savings are 50% against the SDLT that would otherwise have been paid. For example, if you were purchasing a property at £600,000 you'd pay £24,000 (4%) in SDLT. If you employed a mitigation strategy you'd typically pay £12,000 (2%). This fee is payable to the company that sets-up the instrument allowing you to avoid the SDLT. Obviously this represents a £12,000 saving.

As a Director of a company that specialises in such schemes I am happy to confirm that to date we have not experienced any problems whatsoever and have many happy clients behind us.

In the interests of confidentiality we do not discolse full details of how such a scheme works; however, if you have a particular query I'd be more than happy to provide further information - either on this thread or by email.

Additionally, if anyone is interested in using the services of my company to access such a scheme please do not hesitate to contact me.

I hope the above is of use!

Kind Regards

Gareth C. Norris
Protheroe Jones Wealth

seabright

timmyt wrote: »

It also includes the estimated value of any undertaking to carry out work or services, such as a promise from the vendor to carry out repairs to the property. Bet many lawyers forget this!

No, we don't! We really don't want to be fined, struck off or end up inside for attempted tax evasion!

Also, SDLT (Stamp Duty Land Tax) is also payable sometimes when two (or more) parties own a property and one is bought out.

There are no loopholes any more, because if you find one you have to report it to HMRC and they close it down. I worked on a such a case, we report it and the loophole was closed by a law-change by 2pm on the day we reported it! So, my client's benefited (because it was avoidance not evasion) and then the loophole was closed.

I am intriged by the amount of spam suddenly turning up. What do we bet you have to pay an up front fee!

timmyt

Many lawyers do sadly, I know many conveyancers would.

But the point is that whilst the 'schemes' out there are Barrister approved - and some do get through - they are designed for properties closer to £1m and require third party involvement as this area is highly techinical and a lot of extra legal paperwork. Many who offer the schemes won't charge if you end up paying stamp duty - so there is always the worry of the 9 month (I think it is 9 months) window where they police the deal and then require you to pay plus interest
.
Take advice from your lawyer, though most do not get involved as the schemes are just that (schemes), and not widely used because of their falability.

Not for the routine transaction of £500k or less.

Good luck OP.

protheroejones

INCORRECT:
There are no loopholes anymore... (seabright)

INCORRECT:
...designed for properties closer to £1m... (timmyt)

INCORRECT:
...a lot of extra legal paperwork... (timmyt)

INCORRECT:
...not widely used... (timmyt)

INCORRECT:
Not for the routine transaction of £500k... (timmyt)


As for the comment regarding "spam" I posted my original views on the subject as I am highly experienced in this area. By that, I do this day in/day out. I'll not be so vulgar as to comment on the size and turnover of my company but I can assure you we certainly are not concerned whether or not we attract business from this site. Put quite simply - we really do not need the business.

Or is the real problem that there is someone commenting on the subject area who actually has experience in it - rather than making 'trumped-up' claims which cannot be substantiated?

The intention, therefore, of my post was to provide genuinely interested people with the true facts regarding SDLT mitigation - isn't that what this site is designed for?

I'm happy to back-up my claims with facts. Would the individuals I've quoted above also like to do the same? In doing so, it would be useful to know just how much technical experience you have within this field - i.e. transactions to date, success rates etc.


Gareth C. Norris
Protheroe Jones Wealth

seabright

Neither "Gareth C. Norris" or "Protheroe Jones Wealth" return any relevant results on Google. "Protheroe Jones Wealth" is not registered as a company at Companies House either, although Mr Norris states he is a company director (although, of course, PJW might not be the company name).

I would have thought that such a large and successful business would have had some sort of web presence.

LandyAndy

seabright wrote: »

Neither "Gareth C. Norris" or "Protheroe Jones Wealth" return any relevant results on Google. "Protheroe Jones Wealth" is not registered as a company at Companies House either, although Mr Norris states he is a company director (although, of course, PJW might not be the company name).

I would have thought that such a large and successful business would have had some sort of web presence.

I'm guessing he's Gareth Ceri Norris of South Wales with a string of dissolved companies behind him.

RabbitMad

ajdj wrote: »

A stamp duty 'avoidance' method used by a colleague was to offer to pay the vendors estate agents fees. Fees effectively deducted off the purchase price to bring price down under threshold. In this case property was £127,000. 2% estate agents fee = £2,540 + VAT, price now circa £124,000- no stamp duty payable....both solicitors accepted this as avoidance but not (in their opinion) evasion.

HTH.

IMO this is a fine way to go. You as the buyer offer just below the SDLT threshold and won't increase your offer but suggest to the agents if they reduce their fees to the vendor you'd make it up to them.

The danger to the vendor is that this is all verbal and the buyer refuses to pay. Does the EA go after the vendor for the fees.
Alternatively the EA put it in writing that he is willing to lower his fees, how does he bind the buyer to pay his fee?

One way would be if the buyers initial offer was rejected that he employed an intermediary negotiator (prehaps from a different branch of the agency) to get the property for a maximum price of x including stamp duty.

protheroejones

INCORRECT (AGAIN):
I'm guessing he's Gareth Ceri Norris of South Wales with a string of dissolved companies behind him. (LandyAndy)

Your guess is clearly wrong!

As for seabright's post I fail to understand the relevance of the comments you have made and will not be drawn-in to a protracted game of post 'ping pong' on here to indulge you in whatever game you are playing. Firstly, there's simply no relevance to the initial post; and secondly I've got far better things to do with my time.

It is, however, interesting that you choose to comment on such trivial issues rather than substatiating the claims you have previously made. I wonder why?

For anybody who has a genuine interest in Stamp Duty Land Tax mitigation or related queries, please feel free to contact me and I will assist you as best I can.

Gareth C. Norris
Protheroe Jones Wealth