stamp duty shock

  sunnystaines 18:28 25 Mar 2011
Locked

been looking at various options for a house move.

what has happened to stamp duty?

a £600,000 house is a massive £24000 stamp duty had only put aside £15000 for all costs, and a very small morgage now in shock.

  Forum Editor 18:37 25 Mar 2011

Stamp Duty has been called Stamp Duty Land Tax (SDLT), and on house sales over £500,001 the tax is at the rate of 4% of the total purchase price.

That's where your figure of £24,000 comes from.

  sunnystaines 20:05 25 Mar 2011

thanks. its a serious spanner in the works for us as the figure it not much less than the morgage we would get. no wonder parts of the housing market are dead.

only found out by chance using an online stamp duty calculator, at first thought it was 2,400 only later after loss of my note and re checking that the shock hit home.

  sunnystaines 13:07 26 Mar 2011

has any one used this to lower stamp duty, estate agents push it, but a google search shows so bad reading

  spuds 14:02 26 Mar 2011

I wouldn't bother to much about what an estate agent's push, seek advice from a solicitor, CAB or legal advice centre.

  PalaeoBill 00:07 27 Mar 2011

Its not just payable on purchases of property, you have to pay it on a bloody lease now as well. Just to add insult, I have had to pay a professional to fill in the SDLT1 form because I can't understand the dam thing and don't want to be fined for getting it wrong.

  Forum Editor 10:51 27 Mar 2011

of embarking on stamp duty mitigation without consulting a solicitor.

Mitigation in this context is a form of tax avoidance, and HMRC will be looking at it very closely in future. They have up to 6 years after the transaction to issue a recovery assessment, not the 9 months that is commonly quoted by the people who offer the service.

Another common claim is that HMRC has 'approved' the mitigation process, and that's incorrect. They know about it, but that's not the same thing at all. The people who operate mitigation schemes are under an obligation to tell HMRC about it (called a "disclosure"), but that doesn't mean it's approved.

Perhaps it's time to remember the old adage that if a thing sounds too good to be true it probably isn't true. If Stamp duty mitigation was such a great solution surely everyone would be doing it?

  sunnystaines 12:03 27 Mar 2011

i had never heard of till the estate agents pushed it, a google search is putting me off, the building societys seem to have no knowledge of it and are making enq's will discuss with a solicitor when they open.

thanks for feedback.

  sunnystaines 19:38 28 Mar 2011

spoke to a couple of solicitors all seem to have cases running none have had a problem, they cover the deal with no fee no win insurance.

not got full details yet. still very weary about it.

  Forum Editor 20:32 28 Mar 2011

HMRC have issued a statement about Stamp Duty Mitigation Schemes, and it goes like this:

“We are aware that a number of stamp duty land tax avoidance schemes are being marketed to individuals buying residential property. HMRC is addressing the risks posed by these schemes, using its inquiry powers to investigate their use. In general the schemes rely on an interpretation of SDLT law that produces an outcome different from that envisaged when the law was enacted and that HMRC does not accept. HMRC is challenging such schemes and will argue its view of the law through the courts, as necessary.
In the June Budget, the chancellor announced the government will examine whether changes to the SDLT rules on high value property transactions are needed to prevent avoidance in this area. This examination is ongoing.”

And then there's the Council of Mortgage Lenders. They say this:

“These types of schemes are relevant only to a niche market and it is unlikely that most mainstream lenders will accept such arrangements on their mortgage business. In the private client and high net-worth market, private banks will be assessing cases both for their own regulatory compliance and for their business risk."

  sunnystaines 20:48 28 Mar 2011

thank you. I will bring this to the attention to which ever solicitor i choose.

not moved house for over 20 years had forgotton how complicated things can get.

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