Journal :: How to avoid Stamp Duty Land Tax on Buy to Let properties

Published: July 19, 2004
Author: Graham Dragon
Category: Tax
Permalink: How to avoid Stamp Duty Land Tax on Buy to Let properties

I am sure somewhere in your client bank you have clients who are either very much into Buy to Let or are thinking of developing this as a serious investment activity.

Are you, and they, aware that it is possible to avoid paying any Stamp Duty Land Tax on buying these properties? And to do so in a way which has the blessing of Inland Revenue rather than being one of the infamous tax avoidance schemes the Revenue seem determined to eradicate?

Here is what your client needs to do. First, obtain a list of the ?disadvantaged areas? from the Inland Revenue website. Go to http://www.inlandrevenue.gov.uk/so/disadvantaged.htm#1, and at the bottom of the page you can select a list from either England, Northern Ireland, Scotland or Wales.

At this point you are probably thinking ?I know about Stamp Duty Land Tax relief in Disadvantaged Areas ? but that only applies to commercial property?. Well, it is true that there is no Stamp Duty Land Tax on commercial properties of any value in Disadvantaged Areas, so that could be quite a valuable investment opportunity in its own right. But I am talking here about residential, not commercial, property.

Firstly, any properties purchased for under ?150,000 qualify for relief. No Stamp Duty Land Tax is payable on these properties even if they are purely residential.

Secondly, if you have Buy to Let clients who only look at bigger properties ? perhaps concentrating on large ?rooming houses? ? they will qualify for the relief provided they buy at least six at a time.

So, in summary this generosity of Inland Revenue will benefit two types of client. The single property investor who goes for reasonably inexpensive properties. And the established Buy to Let investor who can afford to buy at least six properties at a time.

I hope you find this information of use. Just remember ? never give this or any other valuable information to your clients for free. You can save them a lot of money ? make sure they pay you a proper fee for the privilege.

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About Graham Dragon

Note: We do not accept liability for the content of our e-mail Journal or for the consequences of any actions taken or not taken by yourself or any third party on the basis of the information provided. We are unable to advise you on tax matters. If you wish to obtain further information or help on this or on any other tax matters you should consult with a tax accountant or other suitably qualified and experienced tax professional.

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