SDLT Avoidance Schemes
The SDLT barristers at Cannon Chambers have longstanding experience in all areas of Stamp Duty Land Tax including SDLT avoidance schemes.
SDLT Avoidance Scheme Specialists
The SDLT barristers at Cannon Chambers have longstanding experience in all areas of Stamp Duty Land Tax – from advising private and corporate clients on avoidance schemes and tax planning to managing HMRC investigations and representing clients in the courts.
There are some legitimate circumstances where you can mitigate or avoid SDLT, however, these are often nuanced and complex, with potential fines or criminal prosecution for those who knowingly use illegal avoidance schemes. For this reason, it is important to consult with an experienced tax lawyer before entering into any schemes.
Whether you are hoping to avoid or reduce SDLT, you have been offered an SDLT avoidance scheme, or you are facing HMRC investigation into your use of such a scheme, click here to contact Cannon Chambers for impartial advice and expert representation.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is the tax on all real estate in England and Northern Ireland – both commercial and residential. The rates of SDLT are levied according to the price of the property, with some exemptions according to the property price or incentives for first-time buyers.
Second and additional homes carry the 3% higher SDLT rates on top of the normal rates.
Can I Avoid Paying Stamp Duty Land Tax?
Exemptions to SDLT include buying property as a first-time buyer or buying a property at a price of £125,000 or less. Charities and social landlords can also get SDLT relief.
The 2% surcharge on SDLT normally applied to dwellings bought by non-UK residents can also be mitigated – for example, if the buyer lives in England or Northern Ireland for 183 in any continuous period of 365 days, or if an off-plan property is ‘flipped’ (ie sold at a higher rate) to a UK resident.
Can I avoid paying stamp duty on second homes?
The 3% higher rate of SDLT on additional homes can be avoided in certain circumstances, such as claiming multiple dwellings relief in relation to mixed-use properties or in a divorce or separation.
Find out more about SDLT reliefs with this guide on multiple dwelling reliefs.
What is an SDLT Avoidance Scheme?
A tax planning structure that exploits unintended gaps in SDLT legislation is known as an SDLT avoidance, or SDLT mitigation scheme.
How Do Stamp Duty Avoidance Schemes Work?
Typically, an avoidance scheme turns a single-step purchase of property into a multi-step series of transactions. By applying different exemptions to each step, the intended result is that no SDLT is payable on the overall transaction.
The Finance Act of 2007 introduced a rule to counter this type of Stamp Duty avoidance scheme in the form of section 75A.
How Can Cannon Chambers Help?
If you have been mis-sold an SDLT mitigation scheme, the barristers at Cannon Chambers can offer expert advice and representation – whether dealing with an HMRC investigation, defending you against HMRC in a tax tribunal, getting compensation from a scheme provider or reclaiming double-charged SDLT.
Our expert tax barristers have extensive experience in Stamp Duty – in an advisory role, corresponding with HMRC, reaching agreeable settlements in the tribunals and representing clients in the courts.
Cannon Chambers barristers offer remote consultations or face to face meetings to companies and individuals.
For tax advice and representation in a Stamp Duty Land Tax case with one of the UK’s leading specialist SDLT tax advisers, please contact Cannon Chambers here.
Frequently Asked Questions about SDLT Avoidance Schemes
The Finance Act of 2007 introduced a rule to counter multi-step Stamp Duty avoidance schemes.
Many schemes offer savings on SDLT by breaking a sale down into a number of smaller purchases – each of which carries lower SDLT rates. The Anti-Avoidance Rule makes the buyer liable for tax on the highest amount paid of all purchases. You may be liable to pay retrospectively for SDLT savings you made when using such a scheme, or potentially be facing a fine or litigation.
If you are facing an HMRC investigation where section 75A is in issue, an experienced tax barrister will guide you through the process, and, if necessary, represent you in a tax tribunal.
Yes, there are some exemptions to SDLT in England and Northern Ireland.
- Residential properties bought by first-time buyers, costing no more than £300,000
- From 1st July 2021, the SDLT threshold is £250,000. From Oct 1st 2021, the price band threshold returns to £125,000)
- Houseboats or moveable properties (eg mobile holiday home)
- Any property received as a gift / in a will (inheritance tax may still be payable)/ as part of a divorce or separation
Most schemes that promise to find loopholes in SDLT are not legitimate. SDLT advisors can only ensure that you are maximising or benefitting from legitimate SDLT relief or exemptions (for example, multiple dwellings relief, mixed-use properties, uninhabitable properties etc).
It is always advisable to only use reputable law firms if you are looking for ways to mitigate your SDLT.