Avoid Paying Tax

tomsocr

I have a friend who is moving into another house. He is exchanging with the current owners plus he will need to pay an additional payment. For the sake of argument lets presume my friends house is worth £400k and the house he is exchanging into is worth £500k. He will need to pay the existing owners an additional £100k.

His solicitors have advised that there is no way around paying Stamp Duty on the property.

Can somebody advise on the best way of completing this sale with paying minimal Tax? I was thinking that maybe my friend could agree the sale of £400k and give the owners £100k as a gift?

Anybody any ideas?

tomsocr

I have just thought. Could both parties agree to sell their homes at £12500 to aviod stamp duty. Then give the difference between what the homes are worth as a gift? This would be in this example £100k.

Neither party are related and only know of each other through the estate agent if that would make any difference to gift

CLAPTON

good idea
but
its illegal
the solicitor will tell the HMRC or risk losing his livelihood
if found out both will have to pay the tax due plus 100% penalty
and face a lifetime of having their tax affairs investigated year on year
and of course one of them has to trust the other to 'give' them 100,000 even though there is no contract ( and he knows the other guy is a crook)

Ian_W

Tell your mate to pay £400k for the house and a £100K for some tatty carpets and curtains.
Still illegal,
still get reported,
still subject to tax +100% penalties
but you will have a contract
AND, most importantly -
it will give the Inland Revenue a good laff!

RayWolfe

tomsocr wrote: »

His solicitors have advised that there is no way around paying Stamp Duty on the property.

Why do folk come here for advice on how to break the law?
He pays his solicitor to advise on how the law works, he should take that advice.