Anyone know anything about a scheme (loophole) to avoid stamp duty on a house?

[DimPrawn]

Had a call from a legal firm (linked to estate agents).

Basically, they form an unlimited UK company and you put your money into it. This company then buys the house and on the day of the exchange sells it to you for £1.

Legal fees about £15K to make this water tight.

Evidently only poor stupid people have been paying stamp duty, the rich don't pay it and the loophole has not been closed.

Anyone clued up on this?

[snaw]

I'm sure if you direct your question to the right honourable member for <insert constituency here> you'll get a satisfactory answer.

[Moscow Mule]

Is it really worth the risk?

[DimPrawn]

Might save me £20K.


£20K in my pocket vs Darling's sound very tempting.

He who dares rodders, he who dares.

[PM-Junkie]

I don't see how that can work, since you would be arguing that you are purchasing a house for £1 which is clearly not the case. HMRC would wonder why you are putting loads of dosh into a company that was set up to purchase the house you are living in (presuming you are buying the property as your main residence). HMRC would follow the money trail, and then come after you with a meat cleaver.

[TykeMerc]

Wouldn't the company have to pay the Stamp Duty on their purchase or am I missing something bleeding obvious here?

[DimPrawn]

I don't see how that can work, since you would be arguing that you are purchasing a house for £1 which is clearly not the case. HMRC would wonder why you are putting loads of dosh into a company that was set up to purchase the house you are living in (presuming you are buying the property as your main residence). HMRC would follow the money trail, and then come after you with a meat cleaver.

It does work. Thousands of wealthy people have and are doing and have been for at least 3 years.

Only the little people pay tax.

[Alf W]

I thought this sort of thing was stopped along with buying a house for £50k and then paying £300k for the carpets and curtains?

[DimPrawn]

Wouldn't the company have to pay the Stamp Duty on their purchase or am I missing something bleeding obvious here?

Stamp duty does not apply to companies, only individuals.

[DimPrawn]

I thought this sort of thing was stopped along with buying a house for £50k and then paying £300k for the carpets and curtains?

Nope, this loophole has been mentioned in the budget but never closed.