Stamp Duty Loophole "option to purchase" still in place ?

[JT]

In April 2002 it was reported in the Telegraph "Stamp duty loopholes left open"

http://www.telegraph.co.uk/finance/personalfinance/2760468/Stamp-duty-loopholes-left-open.html

"For very expensive properties, it is sometimes possible to assign a large sum to the right to buy rather than to the property itself.

For example, it might be possible to negotiate to pay £210,000 for an "option to purchase" a property worth £700,000 for £490,000. This would mean stamp duty would be levied at three per cent of £490,000 - £14,700 - rather than four per cent of £700,000 - £28,000."

Is this loophole still available, and if so does anybody know why it is only available to "very expensive" properties ?

[Ian Martin]

There are still Stamp Duty mitigation schemes available and the tax consultants we use certainly operate in this area. These arrangemeents are described as only being suitable for higher value properties because the fees involved make them unviable for lower value properties.
Hope this helps
Regards
Ian

[JT]

Thanks Ian. What's the rough min fee for this sort of tax avoidance ?

[section 44]

That article is out of date. Stamp duty no longer applies to real estate. Stamp duty land tax (stamp duty's replacement for real estate) is fundamentally different and such a "loophole" no longer applies.

SDLT "mitigation" schemes typcially cost 2%+ for residential properties but beware and check out some of my other posts on this subject.