Stam Duty Land Tax Avoidance Scheme

Burridge60

I had heard of this through my work a while ago and was amazed to find that a scheme exists. This has been heightened as a friend has recently asked me about as it has come to his attention.

Broadly I believe that the purchase is made in a series of separate transactions and these all are below the SDLT threshold for the highest rate.

Seems very strange that such a blatant loophole should have been left in the legislation if it was not designed to be exploited especially when GB Plc needs all the cash it can get.

My question is do they work and is there any evidence that HMRC have successfully taken one of the schemes apart.

I don't think it is for the feint hearted and is also only for properties in the upper price brackets due to the fees and charges and the rate of SDLT.

CloudCuckooLand

There have been so many schemes touted, but no-one has ever given a precise description/title for the method.

They usually want you to "consult" them for a fee...which smells of scam.

It all very well for someone to find a way for the tax to be avoided/reduced, but should HRMC spot it and go looking for recompense, you can bet it won't be the "consultant" who has to stump up the cash/fine/imprisonment...

zzzLazyDaisy

This subject crops up on the threads fairly often.

Bottom line - there is no loop-hole.

Burridge60

zzzLazyDaisy wrote: »

This subject crops up on the threads fairly often.

Bottom line - there is no loop-hole.

I recall one City lawyers website suggested they had been doing it for several years "successfully" and had around 400 cases in hand during the year.

Successfully I took to mean that they hadn't yet been challenged.

But 400 cases over say 3 years? on property worth over £400000.

Thats a lot of money not paid to the Treasury.

FTBFun

The people who provide these "schemes" will tell you how great they are and how much success - but of course not how it works. I'm a tax adviser for high net worth individuals and we don't do anything like this as it is blatant evasion of SDLT in my opinion.

My advice is to avoid like the plague.

(expect one of the scheme pushers to appear later today to say how great it is and how much success they've had etc etc)

ItMightBeUsefulOneDay

HMRC are one of the few government bodies you should NOT try and !!!! off.

They have no problem in deciding a new ruling and retrospectively applying it for 10 years. Sure you get away with it now but should they ever, ever get whiff of it they will come after you for 100% of the money, plus interest, plus fine, plus tax, plus VAT, plus admin fees, plus court costs, plus anything else they can think of. Then they'll start going over all your other accounts...

They are above and beyond the law, they can literally make it up as they go and often do. Even decades later you can find them sniffing around your accounts.

zzzLazyDaisy

Burridge60 wrote: »

I recall one City lawyers website suggested they had been doing it for several years "successfully" and had around 400 cases in hand during the year.

400 cases 'in hand' over the year, means that they had dealt / were dealing with 400 such cases in a 12 month period.

And that's just with one firm of solicitors.

IMHO tax avoidance on that scale would rapidly come to the attention of HMRC!

But without a link it is pure speculation.

(Just waiting for a newbie to pop up and offer tell us how it's done.... for a fee...)

timmyt

zzzLazyDaisy wrote: »

This subject crops up on the threads fairly often.

Bottom line - there is no loop-hole.

correct, there is none.

theartfullodger

SCUM, crooks, delusionists, preying on the gullible and greedy.

Luckily nobody posting on MSE is gullible or greedy..

James_N

Burridge60 wrote: »

I had heard of this through my work a while ago and was amazed to find that a scheme exists. This has been heightened as a friend has recently asked me about as it has come to his attention.

Broadly I believe that the purchase is made in a series of separate transactions and these all are below the SDLT threshold for the highest rate.

Seems very strange that such a blatant loophole should have been left in the legislation if it was not designed to be exploited especially when GB Plc needs all the cash it can get.

My question is do they work and is there any evidence that HMRC have successfully taken one of the schemes apart.

I don't think it is for the feint hearted and is also only for properties in the upper price brackets due to the fees and charges and the rate of SDLT.

The only possible way to legally avoid stamp duty or SOME of it is to reduce the price paid below a payment point.

The easiest way to do this is to point out to a seller or EA silly enough to have a property for sale priced just ABOVE a payment point that this is - well - silly. And get them to reduce the price to below the payment point. In practice, no good EA will allow this situation to develop and will advise their client accordingly i.e. price it sensibly.

The only other route is to try and get some of the money they want paid to them another way. The ONLY way to do this safely is to openly offer reasonable money for things they could otherwise take away, like curtains, or sheds, or greenhouses. You will need to be able to prove that you paid a "market" rate for the goods i.e. not an inflated price. A good solicitor can do this, and legally list and track the transactions, but there's a fairly low limit to how much of this you can do and what the IR / Land registry will allow.

Any backhanders or stupid valuations of other goods outside the main purchase price will get both vendor and buyer into trouble.

Burridge60

Answered my own question I guess

http://www.hmrc.gov.uk/avoidance/spotlights10.htm

But they still advertise them and take peoples money. An EA contact said they had a spate of Solicitor changes last year in a few weeks to a City firm. All the properties were £400,000 plus and caused the EA to have to reissue sales particulars and placate people in the chain who didn't want matters delayed unnecessarily.