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Avoiding Stamp Duty

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6022tivo
6022tivo Posts: 781 Forumite
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in House buying, renting & selling
Hello

Asking on behalf of a friend.

Buying a house for £450,000 and the estimated stamp duty is about £12,500
The solicitor had advised us of a "service" in which we do not have to pay stamp duty, but the service is going to cost us 50% of the saving £6000
If "caught" the penalty is that all the stamp duty must be paid to the HMRC (no more than it would have cost originally) and that the 50% will be returned for the service.

Apart from sounding completely, dodgy, thoughts on this.
It is described as a secret loophole that would not be discussed with them?
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  • Doozergirl
    Doozergirl Posts: 33,813 Forumite
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    I thought this had been closed already.

    Getting caught isn’t avoidance, it’s evasion.

    Hardly seems worth it for £3,000 and the potential hassle of reclaiming. If one person reclaims then everyone will. I don’t know about you, but if I do work and get paid for it, I have a terrible habit of spending at least some of it. :o
    Everything that is supposed to be in heaven is already here on earth.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    edited 4 December 2017 at 6:23PM
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    one would have hoped that no one is still foolish enough to try and sell/promote these Stamp Duty Mitigation Schemes by now given that HMRC announced they are firmly in their sights as a target for retrospective tax collection
    https://www.gov.uk/government/collections/tax-avoidance-schemes-currently-in-the-spotlight

    http://www.fridaysmove.com/conveyancing-solicitor-and-stamp-duty-mitigation/14888

    as you have already seen, the weasel words cover the scheme from any liability for the tax you will have to pay when HMRC catches up with you, and "of course" by then the scheme itself will have liquidated, and set up under a different name, so you cannot recover the fees you paid them as "they" no longer exist and their scheme has "failed" meaning you will end up paying 150% of the tax you'd have paid had you not "tried" to evade it in the first place.

    here are some 90 odd "examples" of those who went before you
    http://forums.moneysavingexpert.com/showthread.php?t=4956059&highlight=stamp+mitigation
  • Surrey_EA
    Surrey_EA Posts: 2,042 Forumite
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    6022tivo wrote: »
    thoughts on this.

    Walk away and find a different solicitor to act for your friend.

    The chances of there being a secret, legal, loophole that only they have spotted is devastatingly small.
  • G_M
    G_M Posts: 51,977 Forumite
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    I'm surprised a 'solicitor' is recommending this. Too much risk of getting struck off.

    Not a 'conveyancer' instead by any chance?

    Any fee you pay them to arrange this will never be refunded, even after coming back here to ask for our help........

    And HMRC might not just demand the SDLT owed. But also a penalty for late payment. And potentially a prosecution for tax evasion.....

    Enough said?
  • DaftyDuck
    DaftyDuck Posts: 4,609 Forumite
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    Good advice from Surrey_EA. A solicitor who tries to shaft Her Maj's Revenues is just as likely to do the same to you, one way or another....

    One who tries one of these dated ploys that's bound to fail (by which time the company that was going to refund you has vanished) is likely so incompetent, ignorant, or inebriated (or all three) that I'd run a mile rather than use him.
  • martinsurrey
    martinsurrey Posts: 3,368 Forumite
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    Surrey_EA wrote: »
    Walk away and find a different solicitor to act for your friend.

    The chances of there being a secret, legal, loophole that only they have spotted is devastatingly small.

    with the general anti abuse rules, it is zero!

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/611577/gaar-parts-a-c-2017.pdf
  • theGrinch
    theGrinch Posts: 3,122 Forumite
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    Sounds like a dodgy solicitor - is it Hammond, May and Green sols? Dodgy bunch of swines.
    "enough is a feast"...old Buddist proverb
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    I’m with those who say get a different solicitor there’s something very dodgy about this.
  • kinger101
    kinger101 Posts: 6,282 Forumite
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    Write back to the solicitor asking them to provide;

    (a) Counsel's Opinion from a barrister experienced in tax litigation that the scheme is watertight;
    (b) A guarantee that in the event of investigation by HMRC, that they'll cover 100% of all fees association with any investigation;
    (c) If ruled illegal, they'll cover not only all overdue tax penalties and interest, but an additional £10,000,000 to make you feel better about the irrevocable damage this has done to your reputation;
    (d) A guarantee that in the event you serve a custodial sentence, they be they'll join you in prison, and volunteer to take any unusual treatment on your behalf that is given out in the showers by fellow inmates.


    If they agree to this, and appear to have professional indemnity insurance and funds in escrow to cover possible financial liabilities, then I don't really see why you wouldn't want to do this. I don't know why everyone else is being so cautious.
    "Real knowledge is to know the extent of one's ignorance" - Confucius
  • Slithery
    Slithery Posts: 6,046 Forumite
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    edited 4 December 2017 at 11:00PM
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    But even all of the above wont protect you if the company selling you this 'service' liquidate.

    Run fast. Run very fast.
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