SDLT Savings Schemes - New Anti-Avoidance Measures

There have recently been a number of attempts to avoid payment of Stamp Duty Land Tax (SDLT) on the purchase of residential property. Whilst there has been some debate as to the effectiveness of these schemes, the Chancellor, as part of his Pre-Budget review on 6^th December 2006, brought in anti-avoidance measures that are designed to bring an end to such schemes with immediate effect.

The Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 affect a sale of property where a number of transactional steps are used to effect the sale such that less SDLT is paid than would be the case if a single transaction had taken place. In such cases, the position now is that the scheme is disregarded and the aggregate consideration paid at each step of the transaction is the amount on which SDLT is charged.

We would advise caution if you are intending to enter into any scheme the ultimate purpose of which is to reduce SDLT liability. If you require any advice as to how the new regulations may affect you, we would be happy to discuss your circumstances further.