Taxman cracks down on stamp duty evasion - Tax - Money - The Independent

Taxman cracks down on stamp duty evasion - Tax - Money - The Independent

Homebuyers wanting to avoid or reduce stamp duty costs face a crackdown by HM Revenue & Customs (HMRC) officials. Tax inspectors are taking a two-pronged approach.

First, they're focusing on private sales where buyers and sellers agree to keep a price below a stamp duty threshold while making unspecified payments for so-called fixtures and fittings. Second, buyers of high-value properties who are entering into complex trust arrangements to negate stamp duty liability may face retrospective tax charges.

Often these complex schemes are being offered by estate agency firms in return for whopping commissions – sometimes as high as 50 per cent of the stamp duty charge supposedly being avoided. "Buyers are in some cases being told that these schemes can help them negate any tax liability on a house purchase and this is often backed up with advice from legal counsel," says David Truman from accountancy firm Menzies.

"The watchword with any such scheme, particularly one being offered by anyone involved in the sale process itself, is caution. These schemes are not guaranteed to work, but what is guaranteed is that the Revenue is likely to investigate such schemes and potentially an individual's wider tax affairs."