Stam Duty Land Tax Avoidance Scheme

nick100

FTBFun wrote: »

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)

Changing the subject slightly i have recently bought a house for £300k which was originally divided into 2 flats with 2 seperate addresses, the previous owner had basically knocked a bit of partitioning down and used it as one house.It has been bought leasehold with an option to buy the freehold.However now that it has all gone through ,i find that i have 2 seperate leases and 2 completion certs etc which is all fine but i have paid £9000 stamp duty as it was put through as one transaction am i right in thinking that if there are 2 different addresses that i have overpaid by £6k
as they would have both been around the £150k mark give or take either way.
Thanks Nick

Richard_Webster

Changing the subject slightly i have recently bought a house for £300k which was originally divided into 2 flats with 2 seperate addresses, the previous owner had basically knocked a bit of partitioning down and used it as one house.It has been bought leasehold with an option to buy the freehold.However now that it has all gone through ,i find that i have 2 seperate leases and 2 completion certs etc which is all fine but i have paid £9000 stamp duty as it was put through as one transaction am i right in thinking that if there are 2 different addresses that i have overpaid by £6k
as they would have both been around the £150k mark give or take either way.
Thanks Nick

Was the seller prepared to sell one lease to you and the other to someone else for £150K each? I doubt it. It is only if they are genuinely separate transactions that could have taken place separately, e.g buyer buying two adjacent but separate lots at an auction having had to win the bidding on each one, or one of my clients who bought two flats from a developer in one block. He got no discount for buying two and the developer wasn't bothered whether he bought one or two.

The existence of two leases has nothing to do with anything as far as SDLT is concerned here..

In your case he couldn't really sell it as it is, other than to a single buyer, so sorry you had to pay the SDLT.

sunshinetours

Plenty of previous posts on this. Search "stamp duty mitigation"

Many of these schemes are largely untested as yet which is why they can genuinely claim plenty of "success". Those who understand the workings of HMRC will understand why the chances of being picked up are not as great as many think (however that is no different to any other self assessment tax). There are solicitors and accountants who offer access to this scheme but for those going into it they should very clearly understand the potential risks and you are not going to get that sort of advice here IMO.

There is a fine line between some tax evasion and some tax avoidance (there are many things you can do but also many thing should not do in life) - be careful which ones your firm is associated with.

CloudCuckooLand

nick100 wrote: »

Changing the subject slightly i have recently bought a house for £300k which was originally divided into 2 flats with 2 seperate addresses, the previous owner had basically knocked a bit of partitioning down and used it as one house.It has been bought leasehold with an option to buy the freehold.However now that it has all gone through ,i find that i have 2 seperate leases and 2 completion certs etc which is all fine but i have paid £9000 stamp duty as it was put through as one transaction am i right in thinking that if there are 2 different addresses that i have overpaid by £6k
as they would have both been around the £150k mark give or take either way.
Thanks Nick

http://www.hmrc.gov.uk/sdlt/calculate/linked-transfers.htm

GDB2222

Richard_Webster wrote: »

Was the seller prepared to sell one lease to you and the other to someone else for £150K each? I doubt it. It is only if they are genuinely separate transactions that could have taken place separately, e.g buyer buying two adjacent but separate lots at an auction having had to win the bidding on each one, or one of my clients who bought two flats from a developer in one block. He got no discount for buying two and the developer wasn't bothered whether he bought one or two.

The existence of two leases has nothing to do with anything as far as SDLT is concerned here..

In your case he couldn't really sell it as it is, other than to a single buyer, so sorry you had to pay the SDLT.

Would that still apply if the seller had reinstated the partitioning, so they were actually two separate flats?

sunshinetours

GDB2222 wrote: »

Would that still apply if the seller had reinstated the partitioning, so they were actually two separate flats?

Probably not if both were sold to the same seller by the same buyer. Link someone posted above refers to linked transactions which explains it.

There would needed to have been two separate buyers (not connected) for SDLT to be reduced in that case I believe

nick100

Thanks for you replies,i have just found out what you say is quite right,it works the same way as if you bought a block of flats its the total value of the transaction rather than each individual value.
Never mind just a thought running through my mind.