Leonard Kasler & Company

Stamp Duty

(20 Things to know about this increasingly expensive Tax )

as at January 2001......

1. In the 2000 Budget the Chancellor raised the levels of Stamp Duty spectacularly.

2. Over £500,001 Stamp Duty is levied at 4% on the whole price.

3. Between £250,001 and £500,000, it is levied at 3% on the whole price.

4. Between £60,001 and £250,000, it is levied at 1% on the whole price.

5. Under £60,000, the rate of Stamp Duty is nil.

6. It is an easy tax to collect. Many in the Property World think that the rates will be increased again in due course

7. If you are borrowing money, Lenders may not wish to get involved in fancy schemes to save Stamp Duty.

8. In due course, anti avoidance schemes may be introduced.

9. Consider buying the Property in a limited company, set up specifically to hold that Property and no other.

10. This Single Property Company ("SPC") can be an English Company, a U.K. Company or a Foreign Company.

11. When you want to sell the Property, the Purchaser buys the shares in the SPC instead of selling him the Property itself.

12. Stamp Duty on Share Transfers are a mere 0.5%.

13. All Limited Companies carry with them certain administrative burdens which will reduce the financial advantage received.

14. The impact of other taxes needs to be assessed in the light of the particular circumstances.

           fixtures and fittings:

15. Stamp Duty is not payable on Moveable Items as opposed to Fixtures and Fittings ("F&F").

16. It may be possible for you to apportion the price between the Property and F&F

  on the one hand and the Movable Items on the other

 

17. If you can get the consideration for the Property and F&F below the thresholds mentioned above, it is possible to make a considerable saving.

          example:

18. Stamp Duty on £260,000 is £7,800. If it is possible to apportion £11,000 to Moveable Items included in the sale, the price is reduced to £249,000 and Stamp Duty is reduced to £2,490

19. Any apportionment in the price to moveable items must be reasonable. The Inland Revenue have been known to investigate!

          exchanges

20. If you are swapping your Property with one from your Purchaser, with or without Equality money, it is possible to structure the deal so that only one lot of Stamp Duty is paid.

                           

                             Get in touch now!

                                         Michael Breeze

                                        Leoanrd Kasler & Company