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bigduckontax
bigduckontax, Accountant
Category: Tax
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HiIs it true that an offshore company can purchase a

Resolved Question:

Hi
Is it true that an offshore company can purchase a property and be exempt from stamp duty, and if so, can the directors of another company unconnected with the offshore company buy shares in the offshore company that own the property and therefore making it a wholly owned subsidiary in order to avoid paying stamp duty?
Thanks
Paul
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Paul, I am Keith, one of the experts on Just Answer and pleased to be able to help you with your question. Well, yes and no; here is the advice from Boodle Hatfield LLP: 'If a UK or offshore company is used to purchase a property, it will still pay SDLT on the purchase price at the same rate as an individual would if he/she purchased the property direct. There is no immediate SDLT saving on purchase. An SDLT saving may arise however when the time comes to sell the property. Rather than selling the property it is possible to sell the shares in the company thus transferring ownership of the property. This means that the new purchaser (and any future purchaser of the shares) pays stamp duty at 0.5 per cent (provided it is a UK company) or no stamp duty (if an offshore company is used) on the purchase price of the shares rather than SDLT at 4 per cent or 5 per cent on the purchase price of the property. On a residential property valued at £2 million, subsequent purchasers could save £90,000 from purchasing the shares in a UK company as opposed to purchasing the property direct.' They have a very good article on the subject which I would advise you to read: http://www.boodlehatfield.com/the-firm/articles/is-it-possible-to-avoid-stamp-duty-on-land-and-property I do hope that my reply has been of assistance.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.