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Sestini & Co | on Sun, 10/06/2013 - 19:50 | In
Uncategorized Since its introduction in 2003 (and arguably prior to that date) SDLT has been a contraversial tax to say the least, as evidenced by the number of changes to the rates at which it is charged since its enactment. From a starting rate of 1% for properties costing at least £125,000 it now rises to 15% for properties purchased by certain “non-natural persons” for £2,000,000 or more.
One of the reasons for the controversy about SDLT is that it works on a “slab basis” rather than progressively, so moving over one of the thresholds can substantially increase the SDLT liability and hence the cost of a property purchase.
As with all taxes which are perceived as “unfair”, a great deal of planning has been undertaken over the years by individuals and companies seeking to reduce the SDLT burden on purchasing a property. Anecdotally I believe this may have been as simple as making a separate payment for various fixtures, fittings and garden structures to keep a property below a particular threshold, or as complex as splitting property purchases into several transactions or an elaborate structure involving gifts between individuals and/or trusts.
There have been a number of pieces of anti-avoidance legislation designed to counter this type of planning and so it’s been widely understood that this type of planning is no longer possible.
However, in a recent Taxation magazine article, a leading tax adviser states that responsible stamp duty land tax planning is still possible.
In this month’s Taxation magazine, Sean Randall explains that whilst SDLT now has three types of general anti-avoidance rule and uncertainty over HMRC’s application of one rule in the context of corporate deals has mostly been resolved, uncertainty over another rule has significantly increased following a recent tribunal decision. So, where do the boundaries of the current anti-avoidence legilslation lie? What is “responsible tax planning” and what is now out-lawed by the GAAR and other anti-avoidance legislation?
Link to the full article here:http://www.taxation.co.uk/taxation/Articles/2013/09/25/314011/triple-jump
If you would like to discuss tax planning or any other tax matter with Sestini & Co, please email info@sestiniandco.co.uk or call us on 01761 241861.
