Deferring/delaying SDLT as a cheap loan? Deferring/delaying SDLT as a cheap loan?
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    Default Deferring/delaying SDLT as a cheap loan?

    TLDR; is deliberately paying SDLT late and incurring interest a viable way to get a cheap loan that doesn't impact your lending/credit scores? Is it legal and above board or is it murky territory?

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    We've found a house we want to buy and it looks like we may have a buyer for our current home. As previously covered on CUK, this new house is largely made possible by inheritance in the form of my late parents' house which remains unsold.

    It appears we can just stretch to get a large enough mortgage in the interim but one aspect is we might have to raid ISAs to fund the SDLT (~20k) as it puts us right on the edge... if we need a new car or something in the next few months...

    It appears you have 30 days to pay SDLT upon completion otherwise you start paying interest at the government's set rate, currently 2.75% AFAIK.

    So I wondered, could you deliberately leave this unpaid and willingly pay the interest as a very cheap loan? My concern of borrowing the normal way is it might affect what we can borrow for a mortgage and gain us nothing. In a few months I'd have more dividends or maybe we've sold the other house and all the problems go away.

    I can't see this described as illegal or a grey area, which I wouldn't be happy to pursue... is it legitimate to view this as paying for a loan/deferment from HMRC or is it opening a big can of worms ethically/morally in your view?
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    I did find this: Struggling with stamp duty? You can delay it - AOL Money UK

    But I'm not sure that is correct, you can file the paperwork late for a capped fee but I thought the interest would apply from the date you should have registered it, as well?
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    Tax evasion surely?

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    Quote Originally Posted by d000hg View Post
    So I wondered, could you deliberately leave this unpaid and willingly pay the interest as a very cheap loan? My concern of borrowing the normal way is it might affect what we can borrow for a mortgage and gain us nothing. In a few months I'd have more dividends or maybe we've sold the other house and all the problems go away. ...
    You could, maybe. But I think it is against the conveyancing code of conduct and solicitors won't update the Land Registry until the Stamp Duty has been paid in full (or else the Land Registry themselves won't without a conveyancer's declaration that it has been paid in full). I think this is regardless of whether any mortgagee is involved.

    During the purchase, following exchange of contracts, solicitors make a kind of interim Land Registry registration that expires after a certain time, to prevent any other change being made on the same deed prior to completion. But after that expires with no confirmation, the Land Registry entry reverts to its previous state and legally the vendors still own the place.

    Not sure if it works the same in Scotland. Maybe there the vendors and purchasers just need to ceremoniously exchange a haggis for the deal to legally complete.
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    Quote Originally Posted by d000hg View Post
    I did find this: Struggling with stamp duty? You can delay it - AOL Money UK

    But I'm not sure that is correct, you can file the paperwork late for a capped fee but I thought the interest would apply from the date you should have registered it, as well?
    Why don't you pay it on a credit card balance transfer or a personal loan which you can repay early???
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    Quote Originally Posted by AtW View Post
    Tax evasion surely?
    That's my question... is deliberately paying late at the cost of the interest avoiding tax, or simply using the system legitimately? If you pay your corporation tax late you're not breaking the law, you're just paying late and are charged interest in a similar fashion.

    Quote Originally Posted by MarillionFan View Post
    Why don't you pay it on a credit card balance transfer or a personal loan which you can repay early???
    This is the obvious answer but a)I've no idea if the loan rates are comparable b)I worry that I wouldn't get the loan if I already borrowed a maximal mortgage or the mortgage lender would offer less if I have existing loans.

    It's a nicer way of doing it if it doesn't have such potential issues?
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    Quote Originally Posted by d000hg View Post
    That's my question... is deliberately paying late at the cost of the interest avoiding tax, or simply using the system legitimately? If you pay your corporation tax late you're not breaking the law, you're just paying late and are charged interest in a similar fashion.
    Have you asked your accountant?


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    Lowest loan rates I've seen at the moment are around 3%. Seen similar advertised for credit card transfers.
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    Quote Originally Posted by AtW View Post
    Have you asked your accountant?

    About buying a house? That's for my financial advisor

    Quote Originally Posted by SueEllen View Post
    Lowest loan rates I've seen at the moment are around 3%. Seen similar advertised for credit card transfers.
    I was checking my accounts and noticed similar so barring issues maxing out credit(?) this seems the better route.
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    Have a look at a p2p loan like Zopa?
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