Stamp Duty Mitigation: The Facts

by laurenknowles on October 15, 2014

The house price growth that has recently taken place has resulted in more home buyers having to contend with stamp duty payments. Between 2012 and 2013, £4.9bn was paid in stamp duty and the amount is set to continue growing. It has been predicted that by 2018, at least 75 per cent of buyers will have to pay the tax.

Stamp duty mitigation counsels are continuing to help bring down stamp duty costs for people across the UK but while completely legal, the process still remains a taboo.

The numerous myths and negative press surrounding stamp duty and tax planners means that many eligible purchasers still miss out on the chance to save. We have listed the most common misconceptions around the stamp duty mitigation process in order to silence the sceptics and provide the facts to those considering implementing tax planning on their next house purchase.

1) The government doesn’t like tax planning; the HMRC will know I have implemented tax planning and will want to investigate

The government is clearly not fond of stamp duty plans but with the support of a reputable tax strategist, stamp duty mitigation can be a completely legal process. Most schemes are carried out by trustworthy, reputable solicitors regulated by the Solicitors Regulation Authority (SRA). This body requires legal specialists to act in a client’s best interest and use strategies compliant with all relevant law.

The best stamp duty strategies are known as non-DOTAS (The Disclosure of Tax Avoidance Schemes). This means that you do not have to make HMRC aware of your tax planning and unless your transaction is examined, you can be confident that no one will know of your stamp duty mitigation.

HMRC claim that only three per cent of 1 million transactions are investigated each year. A trustworthy strategist will ensure complete legal compliance when tax planning. They will also liaise with top barristers and obtain advice on taxation, property and compliance to ensure all work is legally robust.

2) It can be a lengthy process which will make my property transaction last longer

Stamp duty mitigation is an area of tax planning that does take time, effort and skill. However, an accomplished tax strategist should be able to put together a robust and legally sound plan that ensures the process remains simple and straightforward for you.

Tax planning will also not necessarily add any time onto your property transaction, but should start one week before contracts are exchanged.

3) It is exclusively for houses which are worth more than £1 million

Buyers are liable for stamp duty when they spend over £125,000 on a property. Rising house prices are currently causing a surge in stamp duty mitigation and more than two thirds of people now pay the tax when they move.

Any person who spends at least £250,000 on a residential or commercial property can put a tax saving strategy in place.

4) The property will not be registered in my name and my mortgage lender and vendor will have to be informed

A tax planning scheme does not affect a property transaction. As the buyer of the property, you will still be named as the rightful owner which will be stated on all Land Registry documents.

When working with a quality tax counsel, clients can trust that their tax planning will remain private. Stamp duty mitigation is also a confidential matter so no other party has to be involved or made aware of it. Top tax strategists ensure that the schemes they offer are in strict compliance with The Council of Mortgage Lenders, meaning that your lender will not be affected or need to be informed.

With the price of houses continuing to rise at such a sharp rate, the question to ask yourself should not be can you afford to take on a stamp duty mitigation plan, but can you afford not to?

Lauren Knowles is a digital content writer for CDP Corporate, who provide tax planning services for residential and corporate property purchases. 



Lauren Knowles is a digital content writer specialising in property law, personal injury claims and medical negligence cases.

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