Stamp Duty Loophole Closed

by Kidd Rapinet on May 23, 2012

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.