MPs still fiddling expenses to buy up houses.

Graham_Devon

John Bercow has written to the expenses regulator warning him not to disclose official documents that show the identities of MPs’ landlords for “security” reasons.

Publication of the names, which was supposed to take place today, would expose the extent to which MPs are exploiting a loophole in the rules that allows politicians to rent their homes to one another. The loophole means that MPs can still effectively build up property nest eggs at taxpayers’ expense, despite official attempts to stop the practice following the expenses scandal.

Sources at the expenses regulator confirmed that “some MPs” were engaged in the practice.

In a letter released last night, it emerged that Mr Bercow had written to the regulator claiming that publication of details of MPs’ landlords jeopardised their security and had led to “grave concerns” in the House of Commons.

“The processing of the data … could involve causing unwarranted damage and distress,” the Speaker wrote in the letter to the Independent Parliamentary Standards Authority (Ipsa). “I should be grateful if you and your colleagues would reconsider such a plan.”

So it seems instead of just blatantly breaking the expenses rules, they will simply join forces and rent each others houses off each other, therefore claiming as an expense.

Do thye ever learn!?

http://www.telegraph.co.uk/news/politics/9615992/Expenses-scandal-MPs-block-details-of-new-expenses.html

grizzly1911

Some certainly don't.

Many MPs are just there for the "power" and the accompanying gravy train - beats working for a living. Actually makeing a difference is a lower priority, apart from a few.

Carl31

they should be charged with 'benefit' fraud. I love the way they get all high and mighty about someone having an extra couple of quid from child benefit, yet do things like this

Gracchus_Babeuf

Anyone can avoid SDLT - simply set up a company and use it to buy the house. Then the company can sell it to you, if necessary. Lawyers can do the paperwork for a few grand.

chewmylegoff

this is bizarre, especially if the arrangements have been put in place since the MP's expenses scandal. even if this doesn't technically breach any rules, any MP who would even think that it was worth doing something like this given the likely public reaction is, frankly, insane, and should be removed from office immediately and consigned to a loony bin for assessment as they may be dangerous.

chewmylegoff

Gracchus_Babeuf wrote: »

Anyone can avoid SDLT - simply set up a company and use it to buy the house. Then the company can sell it to you, if necessary. Lawyers can do the paperwork for a few grand.

I'm not sure what the relevance of this is - but this would not avoid stamp duty, as the company would have to pay stamp duty when it purchased the property. If you then sold the property from the company to yourself, you would have to pay stamp duty again. Not the best avoidance scheme I've ever seen!

grizzly1911

chewmylegoff wrote: »

MP who would even think that it was worth doing something like this given the likely public reaction is, frankly, insane, and should be removed from office immediately and consigned to a loony bin for assessment as they may be dangerous.

Sounds like part of an MP job specification - many are dangerous and don't think any wider than themselves.

chewmylegoff

grizzly1911 wrote: »

Sounds like part of an MP job specification - many are dangerous and don't think any wider than themselves.

imagine if they turned their creativity to doing something good. instead of exploiting loopholes, why don't they bloody well identify them in the tax system and sodding well shut them, you know, like good public servants or something.

Gracchus_Babeuf

chewmylegoff wrote: »

I'm not sure what the relevance of this is - but this would not avoid stamp duty, as the company would have to pay stamp duty when it purchased the property. If you then sold the property from the company to yourself, you would have to pay stamp duty again. Not the best avoidance scheme I've ever seen!

No. These lawyers provide the avoidance service: http://www.cdpcorporate.co.uk/

There are several others too.

chewmylegoff

Gracchus_Babeuf wrote: »

No. These lawyers provide the avoidance service: http://www.cdpcorporate.co.uk/

There are several others too.

they may, but (a) it probably isn't actually legal or at least it is untested with HMRC, and (b) it isn't quite as simple as setting up a company and using it to buy a house, because that doesn't avoid SDLT (and indeed, for high value purchases, now attracts more SDLT).

there used to be a clumsy loophole in the rules which were established to ensure that people buying with sharia compliant mortgages did not pay SDLT twice. this involved buying through a company but paying in two tranches and then assigning the ownership of the house to the individual (which sounds similar to what you were talking about) but that loophole was closed a couple of years ago.

Gracchus_Babeuf

chewmylegoff wrote: »

they may, but (a) it probably isn't actually legal or at least it is untested with HMRC, and (b) it isn't quite as simple as setting up a company and using it to buy a house, because that doesn't avoid SDLT (and indeed, for high value purchases, now attracts more SDLT).

there used to be a clumsy loophole in the rules which were established to ensure that people buying with sharia compliant mortgages did not pay SDLT twice. this involved buying through a company but paying in two tranches and then assigning the ownership of the house to the individual (which sounds similar to what you were talking about) but that loophole was closed a couple of years ago.

It is legal and it has been tested in several cases. I can't comment on the legal technicalities but it can certainly be done otherwise they wouldn't advertise it. The only risk is that HMRC can contest it, but there is an insurance to cover for this.