Stamp Duty Avoidance - How Much Could You Save?

Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK. The tax is charged at different rates and has different thresholds for different types of property and different values of transaction.

For basic property purchases the following rates apply:

Residential Purchase Price	Stamp Duty Rate
up to £125,000	0%
over £125,000 to £250,000	1%
over £250,000 to £500,000	3%
over £500,000 to £1,000,000	4%
over £1,000,000 to £2,000,000	5%
over £2,000,000	7%
Commercial Purchase Price	Stamp Duty Rate
up to £125,000	0%
over £125,000 to £250,000	1%
over £250,000 to £500,000	3%
over £500,000 to £1,000,000	4%
over £1,000,000	4%

Stamp Duty avoidance or SDLT tax planning enables buyers to avoid Stamp Duty normally payable on residential and commercial land or property purchases above £250,000.

This is achieved by structuring your purchase in a manner that enables you to take advantage of a ‘Sub Sale Tax Relief’ which is available under current UK law.

It is a common misconception that Stamp Duty Land Tax (SDLT) applies to all land transactions involving the acquisition of property. On the contrary, the legislation that regulates and governs SDLT provides for many forms of relief from the tax, all of which are perfectly legal.

Many of the reliefs will be familiar as they are widely used, first time buyer relief and disadvantaged area relief are probably the most widely recognised. The relief used for Stamp Duty Avoidance is known as sub-Sale relief

What is Sub Sale Relief?

 

The purchaser (B) buys the property from the vendor (A) as normal and via the solicitor immediately “sub-sells” the property. The sub-sale can be achieved a number of ways but most successful planning achieves it by way of settling the property into a corporate trust (C); a trust of which you are the beneficiary.

The sub-sale completely mitigates the SDLT liability in the name of the purchaser (B).

The purchaser (B) still retains full legal ownership of both the property and the freehold / leasehold, with the only completed contract being registered with HM Land Registry as normal.

Following are some examples of the potential savings available when implementing a typical Stamp Duty Mitigation Scheme. These examples are only estimates and so a formal quotation should be requested for accurancy.

Property Value	Potential Net Savings
£250,001	£3,907
£300,000	£4,688
£350,000	£5,469
£400,000	£6,251
£450,000	£7,032
£500,000	£7,814
£500,001	£10,418
£550,000	£11,460
£600,000	£12,502
£650,000	£13,543
£700,000	£14,585
£750,000	£15,627
£800,000	£16,669
£850,000	£17,711
£900,000	£18,752
£950,000	£19,794
£1,000,000	£20,836
£1,000,001	£26,045
£1,050,000	£27,347
£1,100,000	£28,650
£1,150,000	£29,952
£1,200,000	£31,254
£1,250,000	£32,556
£1,300,000	£33,859
£1,350,000	£35,161
£1,400,000	£36,463
£1,450,000	£37,765
£1,500,000	£39,068
£1,550,000	£40,370
£1,600,000	£41,672
£1,650,000	£42,974
£1,700,000	£44,277
£1,750,000	£45,579
£1,800,000	£46,881
£1,850,000	£48,183
£1,900,000	£49,486
£1,950,000	£50,788
£2,000,000	£52,090
£2,050,000	£74,749
£2,100,000	£76,572
£2,150,000	£78,395
£2,200,000	£80,219
£2,250,000	£82,042
£2,300,000	£83,865
£2,350,000	£85,688
£2,400,000	£87,511
£2,450,000	£89,334
£2,500,000	£91,158
£2,550,000	£92,981
£2,600,000	£94,804
£2,650,000	£96,627
£2,700,000	£98,450
£2,750,000	£100,273
£2,800,000	£102,096

Being eligible to make savings on Stamp Duty depends entirely on your circumstances. There are a number of factors that will have a bearing on whether you are eligible, such as the property value, whether you are a first time buyer, how many properties you are buying, where the property is located and the environmental credentials of the property, to name a few.

To check your eligibility simply complete the quotation Form opposite or call 0845 680 9036.

The legislation that regulates and governs SDLT provides for many forms of relief from the tax, all of which are perfectly legal.

Whilst a number of schemes are no longer valid, the Stamp Duty Mitigation scheme available to you has been a tried and tested tax strategy for some nine years. It has been designed and approved by leading UK tax counsel, Patrick Cannon, Lincoln’s Inn Tax Chambers. (See Patrick Cannon who specialises in taxation advice and advocacy, and is widely regarded as the leading specialist in Stamp Duty Mitigation Strategy).

In addition this SDLT planning includes professional fees insurance as standard to provide peace of mind.

See the HMRC SDLT manual, for more in depth info, or talk to one of the tax planners

Key Features

• Tried and tested tax strategy for nine years
• Planning is supported by one of the UK’s leading tax barristers, Patrick Cannon
• The property is registered as normal at HM Land Registry with you having 100% ownership in your name.
• HMRC compliance with the handling and correct submission of form SDLT1 claiming sub-sale relief on your purchase
• Planning fees fully insured
• Available for both private residential and commercial properties
• Planning can be implemented both before and after exchange
• Suitable for both freehold and leasehold properties
• 100% of the stamp duty land tax liability is mitigated

The process is typically beyond the knowledge of regular conveyancers so often it won't be presented as an option.

To ensure that the tax planning is implemented by Solicitors who are trained and conversant in Stamp Duty Land Tax planning issues, it is generally a requirement that a panel solicitor is used who is authorised and regulated by The Solicitors Regulation Authority. This ensures that the conveyancing and tax planning is carried out without delay and in accordance with the law.

However,If your solicitor is conversant with Stamp Duty Land Tax planning it may be possible for them to handle both your conveyancing and the implementation, but this would need to be discussed.

To apply, simply calculate your saving on the 'Free Quotation' form to the right, enter your contact details and submit. An adviser will then be in contact to confirm and issue your quotation along with full details of how you can take advantage of the savings available.