How do I reduce my stamp duty bill
The short answer is no. It used to be a possibility but these days HMRC deal very harshly with people who try to evade paying the correct amount. There have been a number of schemes, some basic and some complex, which have been marketed over the years but the introduction of the 15% rate for certain purchases of over £2m shows that HMRC and the government are always going to take a dim view of tax avoidance, and SDLT is a relatively straightforward tax.
The fact that some people have entered into an arrangement and apparently benefited is no guarantee that HMRC won’t look into the transaction at a later date, opening the tax payer up to fines and a larger liability than they originally had.
It is a serious criminal offence to evade stamp duty or to conspire to evade stamp duty. This means that your conveyancer will not be able to give HMRC information that they know to be false, and will probably have to stop acting for you if instructions are given to do this. If there is a serious attempt to defraud HMRC then your conveyancer will have an obligation to notify the police and a criminal prosecution may follow. You should be aware that, if this happens, your conveyancer is legally obliged to keep this information from you and would themselves be subject to criminal prosecution if they “tipped you off”. This means that you cannot always rely on your conveyancer to warn you off illegal activities.
Reducing the Stamp Duty payable on your property purchase could save you a large amount of money. Discover how we can help to reduce your Stamp Duty bill. If you are buying a residential or commercial property or land then you need to read on!
Reducing property purchase costs can be very attractive as buying a property in this country is an expensive exercise! Aside from the actual purchase price, there are several charges associated with the purchase that all add up to make a substantial bill for a property purchaser.
With our simple, legal and proven mitigation plan, property and land purchasers can save £thousands on even modest transactions.
Be aware that the most common way to avoid SDLT is to declare part of the purchase price as being paid for fixtures and fittings. This can have the effect of reducing the price paid so that it drops into a lower SDLT band, thereby evading thousands of pounds worth of tax. To stop this HMRC have introduced the requirement that Fixtures and Fittings need to be itemised, e.g. you can still charge £5,000 for them, but you will need to list exactly what that buys and the value for each item. If you attach an unrealistic value to any items then HMRC can declare that part of the value should be attached to the purchase price, which would increase your SDLT liability. You may also be fined and/or prosecuted.
HMRC pay close attention to transactions valued around the SDLT thresholds and can investigate up to nine months after a transaction has been declared. This can be longer if there is evidence of fraud. www.hmrc.gov.uk/so for further info