Well here is one website that bucks the trend. We did some research a while ago on behalf of a client, to see whether avoiding stamp duty would be possible, legitimate, and ultimately, worth it.
After a good look at the options, we advised our client against it.
The schemes are very high risk – simply not worth it just to try and save the cost of stamp duty.
As Ian Montgomery, a solicitor and tax specialist at law firm Boodle Hatfield says, “such schemes can be considered very aggressive tax planning and HMRC is taking an increasingly dim view and is prepared to challenge them through the Tax Tribunal. They often rely on HMRC not chasing individuals who engage in them, and this is a very risky strategy.”
In fact, HM Revenue & Customs says it is currently chasing 1,200 individuals for £35 million of unpaid tax.
Schemes promoted on the Internet include setting up a limited liability company to buy a property, then selling it back to the individual via shares in the company rather than the property itself; and exploiting a loop hole in the current rules by attributing part of the purchase price to chattels (fixtures and fittings) to lower the property price below the stamp duty threshold.
Although those profiting from these schemes claim that they are legal, HMRC are gearing up to challenge them in the courts. And the schemes have to be aggressive to work in the first place – buying a property through an offshore company alone is not enough to avoid stamp duty.
Add to that the fee that you would have to pay for the avoidance service, and the risk is simply not worth the saving.
No, we don’t like stamp duty either, but it remains better to pay it than to risk it.