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Confusion over Stamp Duty Land Tax

I have spoken to several people in the last few weeks who been confused and mistaken about the cost of Stamp Duty Land Tax (SDLT). Once again the problem lies in the fact that the press likes to look at worst case scenarios and focus on a headline number which is in fact misleading.

    The recurring confusion was over the highest rate of SDLT as people seem to think that it is 15% for properties over £1.5m, which is true but also misleading. Let me give you a brief example.

    One gentleman was concerned that his SDLT bill would be £300,000 if he bought a property worth £2m. However, he was rather surprised when I told him that as it was his daughter who was effectively buying the property and as it was her only property, the SDLT bill would in fact be £153,750.

    Do you think that halving the SDLT bill makes a difference? As you can see, this equates to an SDLT rate of 7.7% which is slightly more acceptable than 15%.

    So why is there such confusion over this?

    Well, it is because the headline grabbing/scare story 15% rate is actually two rates:

1. SDLT works on a sliding scale. The maximum rate of 12% is only payable on the value of the property over £1,500,000

2. If this is a second property, i.e. you own a property anywhere else in the world, and/or you are using a corporate structure to acquire the property, then an additional 3% SDLT is payable on the entire sum

    So, if the gentleman in question was buying the £2m apartment for himself, he would have had to pay £213,750 as he owned properties elsewhere. Nevertheless, this is still an effective rate of 10.7% rather than 15%.

    Of course, the more expensive the property, the more of the value falls into the 12% SDLT band. Add the 3% and that is how you get an effective rate of 15%. But, as ever, you need to be sure of your figures before you start even looking for a property. So, please speak to your tax advisers before you start looking for property as there may be other tax implications that you need to consider.

    One final word of caution: there are certain firms that will tell you that they can help you avoid paying SDLT or at least massively reduce the cost. Please be very wary of such firms. Even if the “scheme” works now, which is unlikely, it could be retrospectively deemed as tax evasion and then you will be hit with fines in addition to the expense of the scheme and the SDLT you will have to pay.

    There is also the reputational damage to consider.

    Basically there is no substitute for doing your homework and getting advice from proven, reputable firms. If you would like me to recommend good tax advisers and solicitors, please let me know.
 
Best Regards,
 
Jeremy

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In the book and set of 6 CD’s you will discover:

THE MOST EFFECTIVE WAYS TO FIND "OFF MARKET" PROPERTIES

See the properties that most buyers will never even know exist.

HOW TO HAVE YOUR OFFER ACCEPTED EVEN IF IT IS NOT THE HIGHEST OFFER

Get this right and your chances of making an ideal acquisition rise immeasurably. Counter-intuitively this has little to do with the actual negotiation itself.

HOW TO ENSURE YOU GAIN ACCESS TO THE FINEST PROPERTIES ON THE ESTATE AGENTS’ BOOKS FIRST

Most buyers waste time viewing wildly unsuitable properties and never find their ideal home. Put this technique to use and ensure you see nothing but the best.

WHY RELYING ON THE INTERNET SERIOUSLY AFFECTS YOUR CHANCES OF EVER FINDING THE IDEAL HOME BY MAKING YOUR PROPERTY SEARCH EVEN MORE DIFFICULT THAN IT ALREADY IS

Most prospective buyers turn to the internet to find a property and are disappointed as a result. This book shows you why and what to do.

WHY THE ASKING PRICE OF THE PROPERTY AND THE ACTUAL VALUE CAN BE WORLDS APART, AND HOW YOU CAN ENSURE YOU DON'T OVERPAY OR MISS THE OPPORTUNITY TO ACQUIRE A HOME AT A BARGAIN PRICE

This strategy alone can save you hundreds of thousands — even millions — of pounds on your property acquisition

20+ NEGOTIATION TECHNIQUES TO HELP YOU ACQUIRE YOUR HOME ON THE BEST TERMS POSSIBLE

These are strategies I use in every negotiation to achieve prices my clients would not have thought possible (this may seem too good to be true. However, if you would like to speak to past clients who will confirm this, please contact me. While many of my clients value their anonymity some have kindly agreed to speak to you if you wish).

THE TEN QUESTIONS YOU ABSOLUTELY MUST ASK THE ESTATE AGENT OR SELLER

Information is power in negotiations. These questions are your foundation for negotiating the best price possible

AND MORE...

and many more tips and proven tactics to ensure you successfully purchase your ideal home or investment while avoiding the normal stress, frustrations and unnecessary expense endured by the average buyer.

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Who am I and why should you listen to me?


Jeremy McGivern

My name is Jeremy McGivern. I am the founder of Mercury Homesearch, the internationally renowned property search consultancy, and author of The Insider’s Guide To Acquiring Luxury Property in Prime Central London. I have been acquiring property in prime central London for clients for over 13 years.

Having physically viewed over 22,000 properties in prime central London, studied the details of over 153,400 apartments, houses and investment opportunities and spoken to 232+ estate agents every week for over a decade, my advice is in high demand and has featured everywhere from Bloomberg Television, The Financial Times and The Daily Telegraph to Forbes India and Bahrain Confidential.

Please note that the strategies and techniques revealed in the book and CD’s are not just theory. They have been tested and proven over 13 years of acquiring hundreds of millions of pounds worth of prime London

property for my clients, who include some of the world’s wealthiest families and most successful entrepreneurs and business people - it may surprise you but over 30% of our clients are British and based in London so this information is relevant whether you have bought a property in London before or not.

Acquiring a prime central London home is a minefield for the uninformed. Make sure you put knowledge on your side by reserving your free copy of The Insider’s Guide To Acquiring Luxury Property in Prime Central London and set of 6 CD’s. Simply leave your details above and I will have them sent to you immediately.

Good luck finding your ideal home in London.

 

Best regards,

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Jeremy McGivern

P.S. If you are serious about acquiring a home or investment in London the simple steps in the book and CD’s is guaranteed to save you time, money and stress. Simply request your copy of the book by leaving your details in the form above.