How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3125
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

A commercial property was bought for £495,000 and £99,000 VAT

Customer Question

A commercial property was bought for £495,000 and £99,000 VAT paid for this transaction. Stamp duty on properties below £500.000 is 3% and above of it 4%. The property has a lease of 999 years. Tax Office adds £495,000 buying price with £99,000 VAT and demanding 4% stamp duty of £594,000 while we believed we will pay 3% stamp duty on £495,000. We have claimed back the VAT paid on the property. Could you advise if the Tax Office is using right stamp duty band please
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Stamp duty is often described as an unfair tax because it goes up in stages, one penny over the limit and it goes up by a mouth watering 1 or even 2%! I see your problem, by adding the VAT to the price the duty rose from 3% to 4%. As far as I can see the Stamp Duty Office is correct in the rate it is using. I have, in the past, used them many times and have never known them make an error. Your sole consolation is that you were able to recover the VAT as input tax which, I would gently point out, far exceeds the Stamp Duty Land Tax imposed.
As a side line the Boston Tea Party was not over import duty; at that time tea was the only import to North America taxed at all. It was a demonstration against the stamp duties, often horrendous, applied to almost any financial transaction. I am still old enough to remember 2p on every cheque and receipt issued and my own birth certificate has a 1p postage stamp affixed to it, an emergency war time revenue earning measure!
Sorry to have to bring news you probably did not wish ho hear.
Customer: replied 2 years ago.

Thank you for your reply,

Why I should pay stamp duty for the money which I have paid for VAT and recover later. Isn't it contradict with the nature f stamp duty which should be paid on purchase price.

Expert:  bigduckontax replied 2 years ago.

Much of UK taxation appears contradictory. SDLT is imposed on the consideration passed which in this case includes the VAT. Such transactions are relatively rare as VAT may well inflate the cost of land to such a level as it make it uneconomical to sell as many buyers are not VAT registered. If you do not pay the SDLT than you will have no valid title to the property.

Please be so kind as to rate me before you leave the Just Answer site.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3125
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions