Stamp Duty

[Waldorf]

We are in the process of buying a new house, and the stamp duty on it will be 4%!!

I read about some scheme to avoid paying this (apparently the Russians who are buying up London do it), has anyone done this with any success? Any recommendations?

[TheFaQQer]

There was a scheme about paying a much lower amount for the house and then overpaying for the fixtures and fittings to avoid / reduce stamp duty.

From what I recall, HMRC are meant to be clamping down on it - which usually means that the ordinary bloke will get shafted for a few quid, but the Russian oligarch will be let off a few million.

It's only fair.

[ASB]

Worth reading if considering using one of the many schemes. Not saying they don't work, but HMRC are getting quite agressive.

Tax Advice Network - Blog

I believe a common one is to put the property in a company, then but the shares of the company so the property itself doesn't change hands. I guess the problem will be how to get the property into a company in the first place without that attracting SDLT.

[Pondlife]

Have a looky over here

Depends on your attitude to risk.

[geoff from contracta IOM]

A client recently asked me to investigate this for them and the response from one of the very clever tax laywers I deal with was that there is no current solution ( that stands up to scrutiny ) to the SDLT for the first purchaser, if it is purchased by an offshore Co. then the next purchaser can avoid SDLT by buying shares in the Co. rather than the property. On this basis I would be very wary of anything you might be offered that claims to reduce the stamp duty payable on a purchase if it's not from an offshore co.

[ASB]

if it is purchased by an offshore Co. then the next purchaser can avoid SDLT by buying shares in the Co. rather than the property.

There could surely be issues with that. The major one might be financing. I can't see the average residential mortgage lender being terribly interested.

I suspect also that it might be a bit of a minefield having the corporate asset placed at the disposal of the shareholder.

[geoff from contracta IOM]

There could surely be issues with that. The major one might be financing. I can't see the average residential mortgage lender being terribly interested.

I suspect also that it might be a bit of a minefield having the corporate asset placed at the disposal of the shareholder.

Most lenders are familiar with asset holding structures but it is unlikely your High Street broker will be able to deal with this. Any lending to offshore trusts or companies is usually backed by PG's from the individual behind the arangement. It can often make sense to use a trust type stucture from an IHT planning perspective but this needs careful consideration and expert advice.

[Waldorf]

Thanks for the help - I think I will pass this time, rather stay safe.