I am aware there are a number of different strategies that can be usefully put into practice to try and avoid/delay payment of stamp duty on property transfers. eg. Drop/Double Drop, Nominee Schemes, Title Splitting, Agreement for Lease and Deep in the Money Option to name just a few.
Note that I mean 'avoidance' and not 'evasion'. However I have come across a particular transaction that on the face of it sounds like it may be edging on the latter, i.e. evasion. I simply cannot understand how the structure that has been adopted (and which I detail below) could be a valid scheme. Perhaps someone can offer some ideas?
The transaction:
1. The property is at first wholly owned by a Limited Company
2. In July 1999 the property is sold for £565k to another party by way of two trust deeds, one dated July 1999 (for 2/3rds of the value) and the second in March 2001 for the remaining 1/3rd. The purchaser is the beneficiary under the deed.
3. The deeds themselves are not stamped and the land registry is not told of the sale other than a caution being placed on the title informing them of the trust deed.
4. In December 2002 the title is transferred directly into the name of the purchaser and the consideration is declared to be under 60k - hence no stamp duty is payable.
The net result is that no stamp duty was paid on the transfer (from Limited Company to Trust Deed to individual). My fear is that stamp duty ought to have been paid somewhere along the line. Am I correct in thinking that the Trust Deeds themselves ought to have been stamped?
cheers,
John
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