Stamp Duty Loophole?

Ian_Griffiths_Halifax

Just a bit of fun but who knows the answer?

Reading another thread on somebodies Stamp Duty dilema it got me thinking about something I lost literally seconds of sleep over one night.

Assuming you are not in a deprived/regeneration/deprived area with special arrangements on what the starting point is for Stamp Duty, generally Stamp Duty is payable at at the following rates:

Purchase Price bracket £0 - £125,000 = Nil
Purchase Price bracket £125,001 - £250,000 = 1%
Purchase Price bracket £250,001 - £500,000 = 3%
Purchase Price bracket £500,000 - £1,000,000 = 4%

What would you pay if the purchase price was £250,000.50 or even £500,000.50? Would this avoid Stamp Duty completely as there is no bracket for this?

This is the Governments own web site showing the same brackets http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_10010529?cids=Google_PPC&cre=Money

:rolleyes:

badrol

Nice one.

But then I remembered filling my tax return, where it states that you round all the figures down to the nearest pound, so in effect 250,000.50 would be 250,000 and then they would have you I am sure.

chappers

income you round down ....but expenditure you round up so probably next bracket up.

Dan_Collins_2

WHat you mad??

the .50 is within each bracket you loon!

Ian_Griffiths_Halifax

Dan_Collins wrote: »

WHat you mad??

the .50 is within each bracket you loon!

It's in neither bracket as described by the Governments pricing list, and I couldn't find anything that said anything about rounding up or down. It may be that you round your income figures up or down, but this is a sale of property not earned income.

Are there any Conveyancers on here to give us their opinion?

JasonLVC

It would fall into the 1% tax banding.

Propoerty value between £125,000 to £250,000 = 1%

Anything between £250,000.00 and £250,000.99 would be in the same range up until £250,001.00

The roundings are irrelevant.

Ian_Griffiths_Halifax

JasonLVC wrote: »

It would fall into the 1% tax banding.

Propoerty value between £125,000 to £250,000 = 1%

Anything between £250,000.00 and £250,000.99 would be in the same range up until £250,001.00

The roundings are irrelevant.

Thanks for that. Can you qualify your suggestion with a link to some research or reading material to confirm, as the Governments own web site doesn't state this.

Ian_Griffiths_Halifax

By the way, this is just for fun, but as you can see, it does get you wondering.

Incidently, I was once told, when I put this to a solicitor, that there is a rule that you can only buy property for whole pounds, which would solve the issue, but he could not provide and proof. So I just wonder if it's one of those things 'it's always been that way, so that's the way we do it'.

Josepina

Great post I love things like that!

jediknightwarrior

Nice one!

In reality only the rich avoid paying stamp duty.

http://www.timesonline.co.uk/tol/news/politics/article1530563.ece

JasonLVC

Ian_Griffiths_Halifax wrote: »

Thanks for that. Can you qualify your suggestion with a link to some research or reading material to confirm, as the Governments own web site doesn't state this.

STOP THE PRESSES!!.

I've got my numbers wrong - my apologies. Anything upto and including £250,000 is at the 1%. Anything over £250,000 is at the next rate.

Therefore, £250,000.01p is technically OVER £250,000 and therefore the original idea of 50p takes you into the higher bracket.

Have a look here at the HMRC's own calculator :-

http://sdcalculator.inlandrevenue.gov.uk/SDProperty.aspx

So at least it is a qualfied and confirmed answer!.