Stamp Duty - New Budget

Poundcounter

mchu6am4 wrote: »

What do you mean by a private cash transfer? Is this legal and how is it possible? The only reason I'm asking is I know a FTB buyer who is buying at £136k with £30k deposit - However they would love to buy it at £125k and pay the extra as 'private cash transfer' if I correctly understand what this means.

I'd be very surprised if it's legal. It's basically a form of tax evasion, but it's bound to occur if the government insist on such a perverse "retrospective" tax rate. If the buyer and seller trust each other (or an intermediary) and arrange an off-the-record cash payment to cover smallish sums above the Stamp Duty threshold the buyer can avoid a disproportionate tax payment and the seller can get a better price.

Better if Stamp Duty applied only to the amount above the threshold. For example a rate of around 3% on the amount above £125,000 might be revenue neutral overall but would mean a £135,000 purchase would be taxed at £300 rather than £1,350. At the other end of the band a £250,000 purchase would be taxed at £3,750 rather than £2,500. Then at £260,000 the tax would be £3,900, so no sudden jump of over £5,000 at that threshold either.

Gorgeous_George

Smallish. I know someone who did this with £60K on a £280K house.

Not legal but they haven't been caught - yet.



GG

Massive_2

Poundcounter wrote: »

you might expect a £250,000 sale to be accompanied by a private cash transfer!

Property purchase can be accompanied by an additional payment for associated chattels and fixtures that are not part of the property, and which is exempt from SDLT liability.

But HMRC stipulates that should the transaction be scrutinised, realistic values must be attributed (to both chattels, and to the property itself).

Read into that what you will, but there are always ways and means.