Recent reports have suggested that the introduction of an additional three per cent Stamp Duty Land Tax (SDLT) surcharge upon purchases of second homes has inspired ‘a wave of new tax avoidance schemes’ on the internet, which are likely to be targeted by HM Revenue & Customs (HMRC).
One report, highlighted in FT Adviser, suggests that dubious schemes claiming to ‘mitigate Stamp Duty’ are becoming increasingly common online in the wake of ongoing complaints and confusion surrounding the surcharge, which was first introduced in April 2016.
In December 2015, HM Treasury had to publicly clarify exactly how the surcharge would apply to purchases of additional residential property – yet confusion still abounds.
According to reports, confusion among conveyancing solicitors regarding new SDLT rules and an inability to adequately advise their clients has led to an increasing number of purchasers eyeing up ‘sketchy’ online schemes purporting to ‘save stamp duty’ on property purchases for an ‘upfront fee’.
FT Adviser has warned that such schemes are likely to be targeted by HMRC in coming months – and that those who fall into such traps could be forced to pay up dearly.
An HMRC spokesperson has suggested: “Avoidance schemes do not work. Users end up having to pay all the tax due plus interest and many will be worse off than if they had just paid the right tax up front. Avoidance does not pay.”
The news highlights the importance of seeking specialist, experienced tax advisors for advice – and straying away from dubious online promoters when in doubt.
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