Super-rich dodging stamp duty

tyllwyd

And it looks like some of the owners at One Hyde Park aren't too enthusiastic about paying council tax either

http://www.guardian.co.uk/uk/2011/nov/26/one-hyde-park-council-tax

Graham_Devon

tyllwyd wrote: »

And it looks like some of the owners at One Hyde Park aren't too enthusiastic about paying council tax either

http://www.guardian.co.uk/uk/2011/nov/26/one-hyde-park-council-tax

A band C property costs more in council tax and associated taxes down here than those millionaire pads do!

the_flying_pig

chucknorris wrote: »

Do you happen to know what the costs are for setting up this scheme? Just asking out of curiousity I don't think it's something I would actually do (in any case I can't see us spending over £1m on a property).

i think there are many schemes. the one that a financial advisor ran past me most recently involved paying a fee equal to half of the stamp duty [i.e. 2% of the property compared to 4% stamp duty - this 2% was true of the sub-million houses i was looking at, the fee fell in % terms when you started to move towards super-expensive stuff] which included an 'insurance' component - you'd get the entire fee back basically if the taxman came after you. so for a scheme like that you'd want the odds to be better than 50:50. at the end of the day it wasn't my bag. although i don't think SD is a particularly good tax [in its favour - taxing property rather than income has the potential to be fairer and more efficient; against it - why tax moving?, also why have those ridiculous step changes in tax burden as houses become more expensive] but i guess, well, deep down i suppose i'm quite a loyal subject/citizen really...

Road_Hog

chewmylegoff wrote: »

Complete nonsense. This wasn't "set up" at all.

Stamp duty on shares is 0.5%. You still pay the same tax, just at a lower rate.

Don't be an !!!! all your life.

http://www.express.co.uk/posts/view/235769/Islamic-law-used-to-dodge-stamp-duty

vivatifosi

Graham_Devon wrote: »

A band C property costs more in council tax and associated taxes down here than those millionaire pads do!

They are all band H Graham. If you go to the VOA website's "find your council tax band" section, then put in the postcode (SW1X 7LJ) it will show them all as H. Which makes you wonder why the highest band in the country pays £1,375.24 in the wealthiest part of London. It goes to show how skewed the whole system has become.

wotsthat

vivatifosi wrote: »

They are all band H Graham. If you go to the VOA website's "find your council tax band" section, then put in the postcode (SW1X 7LJ) it will show them all as H. Which makes you wonder why the highest band in the country pays £1,375.24 in the wealthiest part of London. It goes to show how skewed the whole system has become.

It appears that they are not paying council tax irrespective of the banding. Only 9 of the 62 apartments are registered for council tax - 4 of those are paying full council tax and the other 5 get a 50% discount as they are second homes.

For whatever reason 53 of the 62 apartments are not paying any council tax.

tyllwyd

wotsthat wrote: »

It appears that they are not paying council tax irrespective of the banding. Only 9 of the 62 apartments are registered for council tax - 4 of those are paying full council tax and the other 5 get a 50% discount as they are second homes.

For whatever reason 53 of the 62 apartments are not paying any council tax.

And that's only one very high profile block of apartments. It makes you wonder how many more of these luxury apartments there are where there is a similar situation.

silvercar

chucknorris wrote: »

Do you happen to know what the costs are for setting up this scheme? Just asking out of curiousity I don't think it's something I would actually do (in any case I can't see us spending over £1m on a property).

About £3k per property according to the newspapers.

kabayiri

Suppose someone set up a scheme whereby all us normal folk could sell our property to an offshore company in return for a stake in the company.

Would it prove cost effective ? Is there any reason this is only available to the wealthier clients ?

The saving in council tax alone could be very attractive.

chewmylegoff

Road_Hog wrote: »

Don't be an !!!! all your life.

http://www.express.co.uk/posts/view/235769/Islamic-law-used-to-dodge-stamp-duty

From the opening post.

The dodge involves transferring ownership of a property to an off-shore company so when it comes to be sold the buyer purchases the company as a whole assuming de-facto ownership of the property.
Because the deal is classed as a corporate transaction as opposed to a property sale there are no stamp duty obligations involved.....

...Although there is no suggestion that they have avoided paying stamp duty on purchasing said properties, it would now be possible for them to sell them on as a corporate transaction.

The ability to transfer a property into a company and then sell it on (which is what the opening post is about as you can see from the quotes) was most certainly not introduced in the 2005 budget, and has absolutely nothing to do with Sharia law.

In 2005, Labour addressed an issue whereby people who bought using sharia compliant finance were at risk of having to pay stamp duty twice. The legislation was rubbish and opened a loophole which allowed people to not pay stamp duty at all by getting the company to grant an option to the individual to buy the property back.

As for the assertion that the govt will not intervene, this loophole was shut down in the last budget!