From the recent budget the Government began its effort to crush stamp duty land tax (SDLT) avoidance. Those buying residential properties worth £2m plus under the cover of a company in an attempt to avoid SDLT will face a wincingly high charge of 15%. That's £300k for a £2m property.
The Government appears to be serious, according to Jackie Craig, a solicitor in the Property Department at Kidd Rapinet's Maidenhead office: "The Government has said it has doubled the number of staff working on tax avoidance at HMRC and I can see why. Any transactions claiming exemption from SDLT will now have to be much more carefully scrutinised."
For example someone buying a £2m property for residential use and declaring it as such will pay £140k SDLT at 7% but that more than doubles to £300k for those caught using a company to buy the same property for personal use.
Jackie Craig comments: "So far, so fair and I can't see anyone sticking up for people who attempt to shirk their share of tax, but nevertheless there are occasions when this form of transaction is legitimate and a fair practice." If you feel you may need advice, Kidd Rapinet can advise you on the latest circumstances. Call Jackie Craig on 01628 621301 for further information.