Avoiding 3% stamp duty

[Wilmslow]

I have heard of ways and means to sell a house worh more than £250K at under £250K and cash balance the remaining money to avoid 3% stamp duty. anyone happen to know more about this out of interest? As only £10K or so over the £250K threshold I do not consider this too cheeky!

[Ruprect]

I have heard of ways and means to sell a house worh more than £250K at under £250K and cash balance the remaining money to avoid 3% stamp duty. anyone happen to know more about this out of interest? As only £10K or so over the £250K threshold I do not consider this too cheeky!

: How can I commit tax fraud on stamp duty?

[Lewis]

I have heard of ways and means to sell a house worh more than £250K at under £250K and cash balance the remaining money to avoid 3% stamp duty. anyone happen to know more about this out of interest? As only £10K or so over the £250K threshold I do not consider this too cheeky!

Only way I am aware of is to pay just under threshold for house and the rest as chattles (curtains, fridge etc..). But (a) solicitors won't allow you to take the p^ss (at least not good ones) and (b) it is so obvious that HMRC are well aware of people doing it and you are likely to get caught! I understand it used to be common practice until it was clamped down on. In practice what happens is that prices 'stick' to the thresholds, e.g. nobody will buy for £260K. Instead the seller just has to sell for £10K less and accept it as a fact of life.

[KackAttack]

Your solictor will ask you to sign a Land Transaction Return form upon exchange.

This new form is designed to crackdown on people claiming to pay more for fixtures and fittings, therefore bringing the cost of the home below a threshold.

Instead of the previous Particulars Delivered form, a single page asking for the names and addresses of parties, location of the property and price paid, the new form introduced is six pages long and has 70 questions. It must be sent to the Inland Revenue, and the Land Registry will not register ownership until it has a certificate from the Revenue that the form has been received.

[Turion]

Quite possible to do. Private arrangement between buyer and seller obviously, with a brown envelope containing the black money handed over to the seller as contracts are exchanged.

[minstrel]

Quite possible to do.

By possible do you mean legal? They are two very different things.

It's possible to run a limited company and pay 0% tax. Just set up your company bank account and every time the agency pay you just transfer it all to your personal account.

Whether or not that is legal and weighing up the risk of getting caught/fined/locked up is a different matter.

[Diver]

I have heard of ways and means to sell a house worh more than £250K at under £250K and cash balance the remaining money to avoid 3% stamp duty. anyone happen to know more about this out of interest? As only £10K or so over the £250K threshold I do not consider this too cheeky!

[Sausage Surprise]

Your solictor will ask you to sign a Land Transaction Return form upon exchange.

This new form is designed to crackdown on people claiming to pay more for fixtures and fittings, therefore bringing the cost of the home below a threshold.

Instead of the previous Particulars Delivered form, a single page asking for the names and addresses of parties, location of the property and price paid, the new form introduced is six pages long and has 70 questions. It must be sent to the Inland Revenue, and the Land Registry will not register ownership until it has a certificate from the Revenue that the form has been received.

You can do it online.

In Scotland you can do the Title Transfer and SDLT online.

[Turion]

By possible do you mean legal? They are two very different things.

It's possible to run a limited company and pay 0% tax. Just set up your company bank account and every time the agency pay you just transfer it all to your personal account.

Whether or not that is legal and weighing up the risk of getting caught/fined/locked up is a different matter.

Yes, it's dodgy, that why I mentioned private arrangement, brown envelopes and black money. But it could save 5k in tax. Cash payment is king if you need to save tax on anything. Sadly true, but it happens in an overtaxed society such as we now have.

[tim123]

Quite possible to do. Private arrangement between buyer and seller obviously, with a brown envelope containing the black money handed over to the seller as contracts are exchanged.

Why would the seller enter into such an arrangement? How could he possibly enforce payment?

tim