Avoiding Stamp Duty Tax or Evading Stamp Duty Tax?

Avoiding Stamp Duty Tax or Evading Stamp Duty Tax, What's the DIfference?

It is important to note the difference between 'avoiding' tax and 'evading' tax. This article describes some of the ways in which individuals or organisations can legally minimise their tax bill. This includes both residential and commercial purchases in England and Wales. Tax evasion, on the other hand, is illegal, and tends to rely on acts like falsifying accounts. Actions like these are inevitably discovered and punished severely.

The majority of ways in which you can hope to avoid stamp duty tend to have a fairly fundamental effect on the transaction itself; often going as far as determining which property or shares you will buy. If you are hoping to minimise a Stamp Duty Land Tax bill (the duty paid on property transactions) then one of the most enticing tax-breaks available relates to property in so-called 'disadvantaged areas'. This is a scheme devised by the government to encourage the regeneration of less successfully developed areas by offering a tax incentive to those who purchase property there. Currently the non-payment threshold for SDLT is raised to £150,000 on property bought in these areas.


The HMRC and DirectGov websites have search engines through which you can ascertain whether or not individual postcode areas are eligible for this form of tax relief. First-time buyers also now qualify for an exemption on residential purchases with a value up to £250,000. If you are jointly purchasing a property, both parties must be first-time buyers in order to qualify for the exemption.


Sale Prices


It sounds rather obvious, but perhaps the most effective way of mitigating your SDLT liability is by paying less for your property. If you can negotiate a price that is lower than the non-payment threshold (currently set at £125,000) then you stand to save a considerable amount of money. Indeed, simply reducing the purchase price to below the threshold of any of the subsequent brackets can lead to large savings, particularly if the price drops below £250,000 as any sales of property above this price are subject to a 3% tax up to £500,000 and 4% above this figure.

While you are thinking about minimising your tax bill on property, it is also worth considering the tax implications that would apply were you ever to sell up. In this case you should note that fixtures and fittings, as well as outbuildings like a garden shed, are classed as 'wasting chattels'; this means that they are exempt from Capital Gains tax. As a result, you shouldn't be reticent about selling a ready-fitted house because of any potential tax expenses.



For more information, please contact Zach Kendal initially on 0870 063 8661 and you could save your Stamp Duty Tax costs up to 50% or more on your purchase today! Remember, we can still have our Tax Consultants help you Save your Stamp Duty costs EVEN if you have already exchanged - don't delay call 0870 063 8661 now. 

Independent Stamp Duty Mitigation; Stamp Duty Exemption Planning Information. If you could potentially save £1000's by using Stamp Duty Land and Tax planning strategies, why would you NOT want to save your money? For information of users: This material is published for the information of clients. All stamp duty and land tax mitigation enquiries are referred to a network of selected tax professionals.