stamp duty mitigation

julie88_2

Has anyone used this to reduce stamp duty I have been contacted by solicitors & estate agents about this I thought this was illegal with tough penalties

Is the goverment allowing this to kick start the housing market ??

I posted this a while ago but I have lost the thread

G_M

Unless you describe the 'mitigation scheme', and/or refer us to a link, it is hard to say whether it might be legal/illegal, and whether it would work!

julie88_2

here is a link

http://www.hmrc.gov.uk/bulletins/tb71.htm

On completion, you will grant a 3rd party company an option to purchase your property. The option is, in our opinion, capable of being an "other transaction" for the purposes of section 45 above, and therefore you will qualify for sub-sale treatment. The sub-sale treatment will mean that the contract between you and the seller is disregarded for stamp duty purposes. The option agreement will be tailored to your needs and will not to be exercised by the third party. Please be clear that you will have full title on the property.

00ec25

did you notice the bit in the recent budget about HMRC will crack down on tax evasion and close lopholes - SDLT was specifically mentioned "The government also plans to cut down on SDLT avoidance by changing the rules that allow buyers to avoid paying tax on property transactions, in the residential and commercial sectors. The rules will come into effect tomorrow." HMRC press release here


these schemes have never been foolproof and a normal caveat was they not worth even thinking about for properties under £500k

some recent posts about people being forced to repay tax they thought they had got away with here

tyllwyd

Is it the scheme set up for Sharia compliant mortgages which is being used as a stamp duty avoidance scheme for non-Muslims? I've seen it talked about in the Sunday supplements.

G_M

Maybe I didn't read every word (!!) but I cannot see your quote in the link provided.

The quote, out of context, is insufficient to comment.

Strangely, the quote does not read as if written by HMRC (your link is to an HMRC site), but reads as if it were written by someone offering/selling/arranging 3rd party options.

m_13

julie88 wrote: »

here is a link

http://www.hmrc.gov.uk/bulletins/tb71.htm

On completion, you will grant a 3rd party company an option to purchase your property. The option is, in our opinion, capable of being an "other transaction" for the purposes of section 45 above, and therefore you will qualify for sub-sale treatment. The sub-sale treatment will mean that the contract between you and the seller is disregarded for stamp duty purposes. The option agreement will be tailored to your needs and will not to be exercised by the third party. Please be clear that you will have full title on the property.

The only mention of 'third party' in the link you give says:

We also have the opportunity to go back to a transaction that is outside the 9-month enquiry window. This is known as a ‘discovery’ enquiry. A discovery enquiry happens when it becomes clear, (through third party information or otherwise), that not enough SDLT has been paid on a land transaction and, broadly, the reason for that is either that the customer (or certain people connected with him) has acted negligently or fraudulently, or that we did not have enough information before the end of the enquiry window to know that the customer ought to have paid more SDLT.

So even if you succeeded in your avoidance the 9-month enquiry window does not matter for transactions where they still think you should have paid for SDLT.

Sid_Harper

any more opinion on the above?