How the wealthy people try to avoid the stamp duty and taxes in 2016! From the first of April 2016, new UK laws are changing the way property investor live the real estate market.
Renting is now becoming a solid option to avoid the new stamp duty and taxes.
In only one year, since the UK government announced the new property laws and tax regulations regarding UK property market, the number of luxury letting deals on properties worth more than £10 million, from march 2015 to march 2016, has increased by a third! Here the real estate agency runs the report.
West London and central London stamp duties are really expensive.
Renting in the most expensive areas such: Holland Park, Knightsbridge, South Kensington, Mayfair, Regent park, which are the most requested, with leases costing up £5,000 per week shows how UK property investors are hugely turning to renting in order to avoid paying stamp duty on expensive property investments and high taxes.
1/3 up for renting expensive properties and 33% down respect a year ago in selling properties worth over 10m!
Stamp duty went up 3% on April 1, 2016!
This means if a house worth 15m, the levy on that property now costs buyers around £1.7m!
According to their report, all this money means at least 3 years rent into an equivalent luxury property!
For the investors still don’t know how the last taxes has impacted the UK property market, they can find directly the government link here.
If you are UK Property developers and you want to find more info about the real estate market you can read this post.
Taxes avoiding camouflage and offshore companies are all over the news!
The Panama Scandal is huge and also in the USA and worldwide has caused lots of thinking and investigations.
Apparently, in this huge scandal, few Owners of Panama offshore companies used them to invest in the London property market, trying to avoid stamp duty and taxes.
In The Panama Papers scandal, we can read from the news that over 2,800 Fonseca legal adviser document companies are connected to over 6,000 properties in the UK estate market, worth over £7 billion!
Over 90,000 homes in England and Wales are registered to overseas owners.
Over 75,000 of those companies are thought to be owned by companies registered in tax havens!!!
There are always been trial on how to save money or avoid stamp duty also for the second home as reported in this interesting article:
Many tax advisers online explain how investors can understand better the property market and how they can suggest clients the best way to put in safe their investment as this one.
To the question:
– Any way of reducing the stamp duty that I have to pay?
The answer is no.
HMRC Knows that There have been a number of schemes used to trying avoiding stamp duty and taxes, some very basic and some complex, but in the most case has always failed.
The substantial introduction of the 15% rate over £2m worth property shows that HMRC will be always careful to the impact of any tax fraud.
It is a serious criminal offence to evade stamp duty, to conspire to evade stamp duty, or to evade taxes.
Conveyancer is obligated to collaborate with HMRC in a case of an investigation.
In the specific case there is an attempt to avoid stamp duty, taxes or defraud HMRC, then your conveyancer will have a legal obligation to notify the police and a criminal prosecution may follow!
HMRC is getting stricter against tax frauds. No “ tips” to the conveyancer allowed.
In case of a criminal prosecution against the tax offender, the conveyancer is totally obliged to keep safe this information from him and he risks a prosecution in case he gets “tipped”.
This means do not rely on your conveyancer to cover up your illegal tax evasion.
Famous SDLT scam: Property investors to avoid high stamp duties try to declare part of the purchase price as being paid for general fixtures and fitting, drastically reducing the price paid for the property, so that it drops into a lower SDLT band.
This means property investors are evading thousands of pounds worth of UK tax.
To stop this tax fraud HMRC has introduced the requirement that Fixtures and Fittings need to be itemised. Without excuses!
You will need to list exactly what that buys and the value for each item declared.
An unrealistic value means lots of problems….
HMRC, to defend the right of the UK tax payers, can declare that part of the value declared for fixtures and fitting, should be attached to the purchase price, which would increase your SDLT band and you may be fined and/or prosecuted!
What about corporate tax fraud? For these government data, the answer is….NO. …apparently big corporations are well defended.
Any question you may have about taxes you can find help online here.
For all the questions you may have to sell or rent your property fast without any waste of money and time you can contact us directly here
Marketing Director, iMoveEstates