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Stamp Duty Exemption/Mitigation ?

Titanium Avatar
6y, 6m agoPosted 6 years, 6 months ago
I am about to move house, and the hefty SDLT is bugging me a lot. I did a Googling and realised there's a loophole to 'reduce the UK tax payer's liability'. There are legal companies out there who undertake this. They typically charge between 25% to 50% of your saving on Stamp Duty, they prefer house prices over £500k but there are companies who work on £250k properties too. They claim that their approach is completely legal and legitimate, and HMRC is aware of such loophole. Has anyone had a go on any of these?
Titanium Avatar
6y, 6m agoPosted 6 years, 6 months ago
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[mod]#1
What is their approach?

Tax avoidance is legal. Tax evasion is illegal.
#2
what is the value of the house, they probably gonna agree that the fixtures and fittings are x amount and the rest is the prie of the property, bringing it below the threshold?
[mod]#3
MANJ_007
what is the value of the house, they probably gonna agree that the fixtures and fittings are x amount and the rest is the prie of the property, bringing it below the threshold?


Exactly this.
#4
its the way the rich stay rich and dont pay tax.

basically its really for the highest level of stamp duty, over 500k. as i think this is the 5% amount you pay (so 500k = 25k in tax 1million = 50k in tax).

the house is transfered and owned by a company as their assets (the company is offshore). when you sell the house, the new owner buys the company (and therefore any assets - the house). as you are selling a company and not a house, you don't pay stamp duty. Is what i understand from it.
banned#5
this would only work for properties just over each threshold.

you'd never get away with buying say a £300K property and declaring fixtures as £51K
banned#6
gavp;8795272
its the way the rich stay rich and dont pay tax.

basically its really for the highest level of stamp duty, over 500k. as i think this is the 5% amount you pay (so 500k = 25k in tax 1million = 50k in tax).

the house is transfered and owned by a company as their assets (the company is offshore). when you sell the house, the new owner buys the company (and therefore any assets - the house). as you are selling a company and not a house, you don't pay stamp duty. Is what i understand from it.

but probably a bigger tax in any price appreciation in the property.

its 4% BTW on 500K+
#7
MANJ_007
what is the value of the house, they probably gonna agree that the fixtures and fittings are x amount and the rest is the prie of the property, bringing it below the threshold?


That is one approach which individuals can work around it as long as the price of fixtures are reasonable, otherwise tax man will track you down!

They do not disclose their approach (obviously!).
banned#9
another way here if you are a muslim lol

How to avoid stamp duty

Stamp duty can add £30,000 or more to the cost of an average home in the South East. But there are legal ways to avoid most of the tax - and you don’t have to be a “flipping” MP, says Lorna Bourke
Will I need help?
Yes. Most solicitors know how to avoid all or part of the costs of stamp duty and they can put you in touch with specialists who know exactly how to exploit an important loophole.

OK, how does it work?
There are several schemes but the most popular uses concessions granted for Islamic mortgages. Under Islamic law interest is forbidden, so banks can buy a property on behalf of a Muslim client and then lease it to them, so only rent is paid, not interest. Soon afterwards, ownership of the property can be transferred to the client.

Because the purchase has not been “substantially performed”, usually, no stamp duty is paid. This is because the client appears to pay only the final 15 per cent of the purchase price - not normally enough to invite stamp duty.

Where do I start?
You can find specialists on the internet. Start at www.avoidstampduty.com and www.ecademy.com. Top lawyers who prefer not to named confirm that the approach works. The Inland Revenue is aware of the loophole, too, but has taken no action against it - yet.
banned#10
Personally, I would not want to be living in my home knowing that the government could change the law and make me fully liable captial gains for any increase in its value.

£500K purchase would save you about £11K

not worth the risk imo
#11
csiman
another way here if you are a muslim lol

How to avoid stamp duty

Stamp duty can add £30,000 or more to the cost of an average home in the South East. But there are legal ways to avoid most of the tax - and you don’t have to be a “flipping” MP, says Lorna Bourke
Will I need help?
Yes. Most solicitors know how to avoid all or part of the costs of stamp duty and they can put you in touch with specialists who know exactly how to exploit an important loophole.

OK, how does it work?
There are several schemes but the most popular uses concessions granted for Islamic mortgages. Under Islamic law interest is forbidden, so banks can buy a property on behalf of a Muslim client and then lease it to them, so only rent is paid, not interest. Soon afterwards, ownership of the property can be transferred to the client.

Because the purchase has not been “substantially performed”, usually, no stamp duty is paid. This is because the client appears to pay only the final 15 per cent of the purchase price - not normally enough to invite stamp duty.

Where do I start?
You can find specialists on the internet. Start at www.avoidstampduty.com and www.ecademy.com. Top lawyers who prefer not to named confirm that the approach works. The Inland Revenue is aware of the loophole, too, but has taken no action against it - yet.


This is indeed one of the approaches they exercise as I read, and since I am born a muslim, nothing stops me from saving a couple of thousands! :thumbsup:
banned#12
Titanium;8795532
This is indeed one of the approaches they exercise as I read, and since I am born a muslim, nothing stops me from saving a couple of thousands! :thumbsup:

whats to stop anyone really? I can just say I am a Muslim cant I?
#13
You should pay your dues like everyone else does - muslim or otherwise - religion should have sod all to do with it.
#14
moob
You should pay your dues like everyone else does - muslim or otherwise - religion should have sod all to do with it.


as a muslim i agree. u gotta go by the law of the land.
banned#15
moob;8795914
You should pay your dues like everyone else does - muslim or otherwise - religion should have sod all to do with it.

I always thought greed was a sin in Islam anyway ;-)
#16
csiman
I always thought greed was a sin in Islam anyway ;-)


I thought it's common among all religions, (as far as I can remember from Se7en movie). But the question is WHICH one is greed: ripping hefty SDLT or mitigating it :thumbsup:

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