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Nicola-mod
Nicola-mod, Moderator
Category: Law
Satisfied Customers: 21
Experience:  Moderator
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can i buy a house and the land separate too save on stamp duty

Customer Question

can i buy a house and the land separate too save on stamp duty ?
the house i want too buy is 525k it has 2 lakes in 4 acres of land, which is run as a business
can i say buy the house for £400k and the business/land for 125K ?
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question my name is XXXXX XXXXX I will assist you.

You are able to do this. There is a specific stamp duty threshold for mixed used property. Will you operate it as a business?

If the land and business are attached you may be better of buying the business as a going concern. If it was a legitimate trading entity and existed in a company you could buy the shares instead which would only attract 0.5% Stamp Duty.

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 3 years ago.

the house land and lakes are all on the deeds as one the fishery is a registered business but with no assets will the seller have to sell the land to the business first ? and would the tax man not pick up the association between the two ? would a solicitor be able to put this through as two different purchases ? please give more detail and examples of similar cases

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

So is the land is registered to an individual?

Yes this could be done as two purchases but you would have to split the title up which is perfectly possible.

The only issue is to take advantage of the lower rate of commercial stamp duty you would need to actually run the business otherwise you are just purchasing property for residential use.

An example of a mixed used property might be a building that has a shop with a flat above it.

Therefore there are two issues you are either buying an actual business with the property or you are buying a property that has a business being run on it.

Therefore will you actually run the business yourself?

Kind regards

AJ
Customer: replied 3 years ago.

yes the land, house and business are registered to the couple who live there and i want to buy the lot, but over £20k stamp duty is ridiculous. can i buy the land separate and register it as part of the business ? the wife will run the business. what would the the stamp duty be ? i read online that you cant do this if there's a link i.e family ?

if the business is less than £125k isnt the stamp duty 0 ?

Expert:  Nicola-mod replied 3 years ago.
Hello,

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola