Stamp duty loophole coming to an end

lostinrates

RenovationMan wrote: »

We had the roof done pretty much as soon as we moved in, putting multi-foil and Kingspan insulation in the roof itself (we have part vaulted ceilings in all the bedrooms so the ceilings in the bedrooms are the underside of the roof). It made a huge difference in the sound quality of the rooms and in the heat loss. Our house always retains it's snow and frost for a lot longer than other houses in the village.

I was hoping that this would be enough to keep the rooms warm, but the heat just goes out through the solid walls instead.

Oh well, back to the drawing board.

Our snow and frost stays perfectly on the roof, despite no insulation....showing the temps inside the house at times i guess. Though its the same, apart from aroud the chimney, when the wood burner is on iirc.

Yes, we have been writing specifications over the last month and i recall the woprd kingspan insulation in ref to the single story but, also vaulted ceilings in most of it, and where we will also have the inside walls lined with wall insulation.


The rest of the house we intend to insulate between floors and normal indulation when we can in the attic. That also has been granted planning for conversion into large vaulted rooms ( apparantly we have the best king post or truss or something in the county, and it will be of benefit to see it, as our plans have allowed for).

When we did hjave heating we found the house took a long time to warm up...a few days, but then held the heat for a while, even uninsualted, when it went off.

I don't mind a copld house really, just not a freezer temperature one!:D

RenovationMan

lostinrates wrote: »

Our snow and frost stays perfectly on the roof, despite no insulation....showing the temps inside the house at times i guess. Though its the same, apart from aroud the chimney, when the wood burner is on iirc.

Yes, we have been writing specifications over the last month and i recall the woprd kingspan insulation in ref to the single story but, also vaulted ceilings in most of it, and where we will also have the inside walls lined with wall insulation.


The rest of the house we intend to insulate between floors and normal indulation when we can in the attic. That also has been granted planning for conversion into large vaulted rooms ( apparantly we have the best king post or truss or something in the county, and it will be of benefit to see it, as our plans have allowed for).

When we did hjave heating we found the house took a long time to warm up...a few days, but then held the heat for a while, even uninsualted, when it went off.

I don't mind a copld house really, just not a freezer temperature one!:D

Too much comfort makes people soft. Come armageddon and we'll be used to the harsh conditions.

If you have solid walls, you might want to look at a breathable wall insulation, otherwise you run the risk of damp in the walls. Check out my blog on the Green Moneysaving board: https://forums.moneysavingexpert.com/discussion/3791851

FTBFun

Road_Hog wrote: »

Marr, is a BBC Marxist.

The government can do nothing about this loophole. The well off can always avoid paying taxes. This is just BBC speak and c0ckwaffle.

You're talking out of your backside. HMRC/the Government can and have closed similar loopholes in the past.

They're used to be a little scheme for non-doms in the past to buy property here - they'd take a mortgage out using a non-UK lender but to buy a UK property. This mortgage would then be serviced using non-UK income on which no UK tax was paid because it was kept offshore. However that loophole was closed a few years ago, as payments of a foreign mortgage on a UK situs property are now deeme as remittances and brought into the UK tax net.

Personally I haven't seen this much in my line of work, but that's because I mainly deal with US citizens who have problems when it comes to dealing with non-US registered companies anyway.

chewmylegoff

FTB - how do you think hmrc will be able to police the sale of shares in an overseas company which owns a uk property? I suppose they could say that uk tax was payable on the transaction, but it would be impossible to enforce as hmrc would have no means of detecting the transaction.

chucknorris

FTBFun wrote: »

You're talking out of your backside. HMRC/the Government can and have closed similar loopholes in the past.

Why on earth is language like 'talking out of your backside' necessary?

I don't know if he is right or wrong, but assuming he was wrong, have you never made a mistake?

wotsthat

chewmylegoff wrote: »

When a company buys a property it still has to pay stamp duty as normal, so one company selling a property to another company wouldn't achieve anything. In order to get the property into the company in the first place I think you gift it to avoid paying stamp duty again.

I'm a bit cynical. So when I hear it'll only affect foreigners, bankers and the super rich et al. I tend to think it won't and wonder how it will be applied to natives, non bankers and the middle classes.

There are a number of ways to deal with the situation you describe. One is to make it a requirement for stamp duty to be payable when a company is bought out. It's a difficult one to police as it puts the onus on the company but just a few companies fined for breaking tax laws would help highlight it.

The other way is to apply stamp duty to the gifting of houses (I didn't know it was exempt). This would also make it more difficult to dispose of assets to avoid care fees.

It's all a bit complicated though. A better approach would be for the government to spend less and be able to afford a reduction in taxes on housing.

Pennywise

chewmylegoff wrote: »

FTB - how do you think hmrc will be able to police the sale of shares in an overseas company which owns a uk property? I suppose they could say that uk tax was payable on the transaction, but it would be impossible to enforce as hmrc would have no means of detecting the transaction.

Hit the nail on the head. It will be very interesting to see how they will control this. As far as I know, there is no procedure/requirement to declare details to HMRC when shares in a limited company are sold from one person to another in the UK, let alone abroad. The nearest we have is the stamp duty requirement to pay the duty on the transfer of shares but that is a very superficial return and doesn't cover overseas based companies. Nor does it catch a situation where shares aren't actually "transferred", i.e. where the existing/old shares are returned to the company and new shares are issued to the new owner. The proposals certainly won't be quick or simple to implement. Unless, of course, the Treasury do another foul up of a new rule and create something that causes a lot of work, time, effort and cost for the average "innocent" person yet fails miserably to be able to be enforced against those who are the culprits for whom the new law was aimed at. The Treasury have done that plenty of times in the past.

chewmylegoff

wotsthat wrote: »

I'm a bit cynical. So when I hear it'll only affect foreigners, bankers and the super rich et al. I tend to think it won't and wonder how it will be applied to natives, non bankers and the middle classes.

There are a number of ways to deal with the situation you describe. One is to make it a requirement for stamp duty to be payable when a company is bought out. It's a difficult one to police as it puts the onus on the company but just a few companies fined for breaking tax laws would help highlight it.

The other way is to apply stamp duty to the gifting of houses (I didn't know it was exempt). This would also make it more difficult to dispose of assets to avoid care fees.

It's all a bit complicated though. A better approach would be for the government to spend less and be able to afford a reduction in taxes on housing.

Stamp duty is already payable when ownership of a uk company changes it's just the rate is 0.5% and so is lower than the stamp payable on a property transaction. This is the basis for the avoidance of tax.

When an overseas company changes hands, no uk is payable because it's not a uk asset (cgt would be payable on profit if seller of shares is domiciled in the uk for tax purposes as cgt levied on worldwide gains for uk doms- not a problem for Russian oligarchs).


Stamp duty is paid on the consideration- so you can sell a property for £1 and the buyer pays no stamp duty even if it is worth £100 billion (as long as there is no linked transaction to transfer the real consideration). In order to change this they would have to effectively abolish stamp duty and introduce a new tax in its place which was payable on the market value of any asset regardless of the sales consideration.

That would be horribly difficult to implement and potentially have wide ranging consequences for e.g. Married couples wanting to transfer assets between themselves in order to make use of each other's annual allowance.

wotsthat

chewmylegoff wrote: »

Stamp duty is already payable when ownership of a uk company changes it's just the rate is 0.5% and so is lower than the stamp payable on a property transaction. This is the basis for the avoidance of tax.

When an overseas company changes hands, no uk is payable because it's not a uk asset (cgt would be payable on profit if seller of shares is domiciled in the uk for tax purposes as cgt levied on worldwide gains for uk doms- not a problem for Russian oligarchs).


Stamp duty is paid on the consideration- so you can sell a property for £1 and the buyer pays no stamp duty even if it is worth £100 billion (as long as there is no linked transaction to transfer the real consideration). In order to change this they would have to effectively abolish stamp duty and introduce a new tax in its place which was payable on the market value of any asset regardless of the sales consideration.

That would be horribly difficult to implement and potentially have wide ranging consequences for e.g. Married couples wanting to transfer assets between themselves in order to make use of each other's annual allowance.

I was looking for where it would actually hit the middle classes - transfer between couples.

It's not that difficult really. Where a UK property changes hands even if it's due to a company takeover then it needs to be declared to HMRC and due tax paid. Ignorance of the law isn't a defence.

The question for me is whether it's really worth the effort.

chewmylegoff

But it is declared to hmrc - it's just that no tax is due. So you need to change the way tax works so that tax does fall due when the property is transferred into the company. Even then there is still incentive to buy a property via a company and pay stamp duty as normal so it is easier to sell onwards.

And that doesn't address the fact that quite large numbers of uk properties are already owned by foreign companies, so unless you do something quite dramatic they will be outside the scope of stamp duty forever.

I have been trying to think of a solution and all I can think of is passing legislation which enables the govt to seize the uk assets of foreign companies, which is generally known as "economic suicide".