Friday, September 28, 2012

Why Don't the HMRC Close Down SDLT Schemes?

SDLT - Stamp Duty Land Tax in the UK - all of us hate paying it on real estate transactions, whether land or property, but you have to. Or so I thought. Tax avoidance scheme promoters charge a substantial fee but may completely eliminate Stamp Duty payable to the HMRC. The HMRC naturally do not like this and they're issuing propaganda regularly to try to eliminate this avoidance technique. Effective SDLT Schemes are targeted and so are intermediaries and players in the field, like the CML, mortgage providers, as well as the SRA (Solicitors Regulation Authority). Schemes are accessible for cash buyers, mortgage buyers, limited companies, UK individuals, married people, LLPs, unmarried couples and UK trusts.
The HMRC are having a supposed crackdown on SDLT avoidance. They have apparently been investigating past land transactions and apparently have been making use of the land registry's computer system to identify likely transactions. In some instances, usually where the scheme provider made mistakes or simply didn't implement tax avoidance whatsoever, they've been successful. One such scenario resulted in the solicitor involved being struck off, however, note that in this case the SRA compensated all the clients involved to the full extent of the SDLT, which is potentially ironic but many of the clients didn't know they hadn't paid the stamp duty.
The reality is the loopholes exist in the law. The HMRC has been phenomenally unsuccessful in actual fact in challenging Stamp Duty avoidance in the courts - or rather the "First Tier Tax Tribunal". Their best weapon is propoganda, and let's face it, it works. Providers are already complaining that business is down purely because of it. Newspaper articles, blogs, and threats to the CML and SRA are increasingly being effective. They particularly enjoy threatening retrospective legislation even though it's just not going to happen. Their threats drive fear into the hearts (and the bowels!) of Joe Public, who imagine the HMRC repossessing their property or locking them up and throwing away the key. Irrational as this is, and even though the reality is nothing at all happens, HMRC enjoy stoking up and playing on this basic human emotion.

No comments:

Post a Comment