Jump to content
House Price Crash Forum
Sign in to follow this  
Executive Sadman

Avoiding Stamp Duty?

Recommended Posts

I was wondering...

As a FTB im not sure how the paperwork when one 'buys' a property all goes through.

My basic question is can one avoid stamp duty by not registering the sale

I only ask, because...

...in this case a flipper (i assume) bought this house at auction for £142,000 last year

Lot 103 - 7 sage close, northampton http://www.eigroup.co.uk/auctioneers/templ...a=539&c=hah

It was then almost immediately put on with an estate agent for £164995, and (appeared) to sell almost immediately.

Didnt appear on the sold prices website until recently, and a sale price of £145,000 not £142000 is quoted.

http://www.houseprices.co.uk/e.php?q=SAGE+...ampton&n=10

so, either...

the auction buyer flipper got cold feet and re-sold for £3k profit ( or probably a small loss once SDLT, agents, solicitors have been paid off (unlikely, as at the time this was the cheapest similar house by a long shot)

or,

he actually paid £145000, not the £142000 as reported in the auction.

Just interested, wondered if you flip property is there a way to avoid any Stamp duty?

Or, IIRC if he operates as a business the sale price isnt reported at all

House might of been a repo in the first place if that matters.

Share this post


Link to post
Share on other sites

can avoid if you exchange and don't complete.

SD charged on completion.

eg buy with year long completion date, original owner doesn't insist on completion, and then sell before completion.

Edited by grizzly bear

Share this post


Link to post
Share on other sites
can avoid if you exchange and don't complete.

SD charged on completion.

eg buy with year long completion date, original owner doesn't insist on completion, and then sell before completion.

So its entirely possible to flip a house without paying SDLT (at any price) legally?

Share this post


Link to post
Share on other sites
So its entirely possible to flip a house without paying SDLT (at any price) legally?

The quick answer to your question is No.

Explanation thereof:

1. Stamp duty is payable on completion (the present threshold is 1% abover £175k). However, regardless of whether or not any duty is payable, HM Revenue & Customs (HMRC) must be notified of the transaction at completion.

2. The buyer's solicitor will on completion, submit a "Stamp Duty Land Transaction Return" (SDLT1) to HMRC (regardless of whether or not stamp duty is actually payable on the property). This contains details of both the seller and the buyer, the buyer's NI number, amount paid for the property etc.

3. When received, HMRC checks the return, and thereafter issues a clearance certificate (SDLT5).

4. Any disposition of land acts as a trigger for registration at HM Land Registry (HMLR), which shall not register the disposition unless form SDLT5 accompanies the registration application.

5. A buyer must acquire registered legal title, before he or she can legally sell. Think about it - as a flipper you could not acquire legal title in the first place unless the property that you had bought had been registered at HMLR previously. The fact that HMRC will inevitably have been notified of the transaction, means that any attempt to circumvent the system will be doomed to failure.

Share this post


Link to post
Share on other sites
The quick answer to your question is No.

Explanation thereof:

1. Stamp duty is payable on completion (the present threshold is 1% abover £175k). However, regardless of whether or not any duty is payable, HM Revenue & Customs (HMRC) must be notified of the transaction at completion.

2. The buyer's solicitor will on completion, submit a "Stamp Duty Land Transaction Return" (SDLT1) to HMRC (regardless of whether or not stamp duty is actually payable on the property). This contains details of both the seller and the buyer, the buyer's NI number, amount paid for the property etc.

3. When received, HMRC checks the return, and thereafter issues a clearance certificate (SDLT5).

4. Any disposition of land acts as a trigger for registration at HM Land Registry (HMLR), which shall not register the disposition unless form SDLT5 accompanies the registration application.

5. A buyer must acquire registered legal title, before he or she can legally sell. Think about it - as a flipper you could not acquire legal title in the first place unless the property that you had bought had been registered at HMLR previously. The fact that HMRC will inevitably have been notified of the transaction, means that any attempt to circumvent the system will be doomed to failure.

what if house bought by offshore company, and then its the shares in this company that is sold on? in this case house technically hasn't changed hands?

Share this post


Link to post
Share on other sites
what if house bought by offshore company, and then its the shares in this company that is sold on? in this case house technically hasn't changed hands?

that could turn out expensive as capital gains tax would need to be paid, plus admin, stamp duty on shares etc.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   323 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.