Relocation Expenses & Tax

gezr · 9 January 2012 at 9:57PM

Hi,

I have query and would welcome any advice.

I have a new job in London with a very good relocation package. I understand the first £8000 is reimbursable to me tax free. After this it is taxable at my standard rate. The thing I dont get is stamp duty. The largest share of the relocation is the stamp duty. I will use the £8K tax exemption before I even consider paying my stamp duty. Therefore I will be taxed on a tax bill which seems very unfair and very advantageous to the government!

thanks Gerard

pjclar02 · 10 January 2012 at 9:21AM

Hello there

Is your employer paying the stamp duty and other costs? Or are they just paying you a flat £8,000?

gezr · 10 January 2012 at 6:48PM

The employer will refund relocation costs up to £30K.

pjclar02 · 10 January 2012 at 8:37PM

Indeed - I think if I were in your shoes, I would look at it that I don't have to pay the stamp duty, and therefore save 100% of the stamp duty cost, in exchange for paying tax on the benefit at your marginal rate. Even though you have to pay tax on the benefit, this will still be cheaper than paying the stamp duty....

I see what you mean that it is a tax on a tax, but the alternative is that your employer would be giving you something for free and if this were possible then the whole tax system would be brought down!