It's Not Just First Time Buyers Who Can Save on SDLT costs...

In his 2010 Budget, Mr. Darling announced a temporary holiday for 2 years in respect of Stamp Duty Land Tax (SDLT) on homes purchased by First Time Buyers (FTB's) up to the value of £250,000. Great news for this sub-set of property buyers, but not of much use or interest to any other buyers. However, a little known tax planning method regularly used by the wealthy exists to save on SDLT for properties above £250k and not only for FTBs...

Through a properly constructed and legal SDLT Mitigation Scheme, all buyers of all types of property above £250k can save a significant amount of money. Provided the right type of scheme is used, this is perfectly legal and legitimate Tax Planning; after all, Lord Tomlin stated in the case of IRC vs Duke of Westminster (1936) 19 TC 490 - every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be.

There are of course always going to be schemes 'out there' which are not legitimate, and which are likely to get you into trouble with HMRC if you use them, usually involving offshore companies and the like, but how can you know if a scheme is legitimate or not?

It's difficult I know, but I suggest you bear in mind that if it sounds or feels to you like it may be dodgy then listen to your instincts.

At The Money Helper, we use schemes with confidence for our clients' tax planning in this area, and the aspects that deliver this confidence are just the sort of things any prospective purchaser considering using a SDLT Mitigation Scheme should be looking for from a scheme arranger, such as:

The Scheme should have the support of Counsel's opinion. The Counsel must be an experienced tax Barrister of Queen's Counsel - Our Schemes have the support of the Counsel's opinion at the highest level Reg Nock (leading UK stamp duty authority and author of ‘stamp duty land tax’), Patrick Cannon (author of ‘Tolley's Stamp Taxes’ and ‘Tolley's Disclosure of Tax and VAT Avoidance Schemes’) & Rory Mullan, specialist SDLT lawyer at Tax Chambers, London.

The Scheme should be unlikely to attract negative attention from HMRC - Our Schemes are all pre-approved by HMRC and have a disclosure number which is quoted on the SDLT 5 forms submitted to HMRC with every completion.

The Scheme should be low risk and non-aggressive - Our Schemes do not need either the vendor or the lender’s involvement in the transaction or affect either their title to the asset or ability to realise funds from the sale of their property.

The Scheme should not be a 'punt' on the part of the purchaser - Our Schemes are all (except one rarely used and particularly complex one) on a no-win-no-fee basis and require no upfront payment whatsoever, fees are only payable at the point that the SDLT savings are taken by the purchaser.


Tax Planning strategies such as SDLT Mitigation are traditionally viewed as the preserve of the ultra-wealthy only, and it is true that those who have the greatest potential benefit are surely the most likely to use these to do so; however the same proportional savings can be and are enjoyed by any of our clients buying property from £250k upwards with a minimum saving at this level of £3,681.

The savings on higher priced purchases know no limits, for example The Labour Party saved £210,000 in SDLT when purchasing their London HQ building through the use of one of the Schemes we utilise, if you're interested in this story you can read more at http://www.independent.co.uk/news/uk/politics/labours-tax-dodge-on-sale-of-hq-saved-163210000-stamp-duty-427849.html

Useful Links:
SDLT Calculator - calculate the Stamp Duty Land Tax payable on any UK property Purchase

SDLT Rates - Information on the current Stamp Duty Land Tax rates & Thresholds

SDLT Mitigation Schemes - Information on Stamp Duty Land Tax Mitigation Schemes