Ltd company to avoid SDLT?

HappyMJ

jjgold wrote: »

pay the tax you owe and stop trying to avoid it you scrounger

LOL...politicians have always avoided paying tax. What's wrong with us doing exactly the same? I would never advise anyone to evade tax but avoiding/minimizing tax is legal.

adonis10

jjgold wrote: »

pay the tax you owe and stop trying to avoid it you scrounger

Firstly, I don't owe any tax so what tax is it you would like me to pay? Secondly, I will pay whatever tax I have to, as I always have. Finally, what gives you the right to call me a scrounger? It's called tax planning and it is precisely what wealthy people and corporations do to preserve and increase their wealth.

kidmugsy

Are you really considering gambling with a property worth about £200k to avoid a 3% stamp duty charge?

Dead_keen

adonis10 wrote: »

technically, but it would be in my parents' eyes so no issue there.

So what you are saying is that the flat is 'really' yours and the rent is 'really' yours. If so then it is your rent for tax purposes and so you would need to put in on your tax return. Some times tax does work on technicalities. But most of the time it looks at a realistic view of the facts. And that's where your idea falls down big time.

getmore4less

Dead_keen wrote: »

So what you are saying is that the flat is 'really' yours and the rent is 'really' yours...

Then you fall into gift with reservation rules.

IF the parents are asset poor then a proper gift also overcomes the CGT issue on death if not swallowed by care.

Keep_pedalling

Dead_keen wrote: »

So what you are saying is that the flat is 'really' yours and the rent is 'really' yours. If so then it is your rent for tax purposes and so you would need to put in on your tax return. Some times tax does work on technicalities. But most of the time it looks at a realistic view of the facts. And that's where your idea falls down big time.

I think the OPs plan is that his parents collect the rent and pay the tax and they then gift him the rent back. I wonder if they really want the responsibility of being a landlord and having to complete SA returns every year, let alone risk a HMRC investigation into their financial affairs.

Dead_keen

Keep_pedalling wrote: »

I think the OPs plan is that his parents collect the rent and pay the tax and they then gift him the rent back. I wonder if they really want the responsibility of being a landlord and having to complete SA returns every year, let alone risk a HMRC investigation into their financial affairs.

That's his plan. And it is a fine one. But it looks and feels like a simple (or bare) trust. What else would you say it is? And if it is a bare trust he is treated as owning the flat for pretty much all tax purposes.

densol_2

All of this is really rather a lot of fuss just to save a one off payment of 3% ? I agree about saving tax tho

adonis10

densol wrote: »

All of this is really rather a lot of fuss just to save a one off payment of 3% ? I agree about saving tax tho

When the one off payment is an extra 8 grand, it's rather a big issue.

tired_dad

8k is nothing. All these big tax avoidance games are best left to serious players for whom it is a game, and any later fine etc would just be loose change. If your going to pay £500k in SDLT it might be worth seeking professional advice.

Do what you want but ask yourself a simple question. Could you easily afford extra taxes or fines if things did not work?