• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Deferring/delaying SDLT as a cheap loan?

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    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?

    -------

    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?
    Originally posted by MaryPoppins
    I'd still not breastfeed a nazi
    Originally posted by vetran
    Urine is quite nourishing

    #2
    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?
    Originally posted by MaryPoppins
    I'd still not breastfeed a nazi
    Originally posted by vetran
    Urine is quite nourishing

    Comment


      #3
      Tax evasion surely?

      Comment


        #4
        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.
        Work in the public sector? Read the IR35 FAQ here

        Comment


          #5
          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???
          What happens in General, stays in General.
          You know what they say about assumptions!

          Comment


            #6
            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.

            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?
            Originally posted by MaryPoppins
            I'd still not breastfeed a nazi
            Originally posted by vetran
            Urine is quite nourishing

            Comment


              #7
              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?

              Comment


                #8
                Lowest loan rates I've seen at the moment are around 3%. Seen similar advertised for credit card transfers.
                "You’re just a bad memory who doesn’t know when to go away" JR

                Comment


                  #9
                  Originally posted by AtW View Post
                  Have you asked your accountant?

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

                  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.
                  Originally posted by MaryPoppins
                  I'd still not breastfeed a nazi
                  Originally posted by vetran
                  Urine is quite nourishing

                  Comment


                    #10
                    Have a look at a p2p loan like Zopa?
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment

                    Working...
                    X