ChatterBank0 min ago
House Swap
A couple I know (in England) have a 4 bedroom house and their family flew the nest long ago. They are considering a legal swap/exchange of their house for a neighbour's smaller 3 bedroom house provided the neighbour makes a payment towards the difference between the agreed market value of the houses. The neighbours have a young family and don't want to move away because of disrupting their children from school.
Can these couples swap their houses rather or do they have to buy and sell the houses to each other?
If they can swap, would there be any stamp duty involved if the 'difference payment' in values is something like 50,000 pounds?
I'm new to AnswerBank so I'm sorry if these questions have been asked before.
Can these couples swap their houses rather or do they have to buy and sell the houses to each other?
If they can swap, would there be any stamp duty involved if the 'difference payment' in values is something like 50,000 pounds?
I'm new to AnswerBank so I'm sorry if these questions have been asked before.
Answers
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Many thanks for both of your answers 'factor30' and also thanks for your answer '
All your answers were very helpful and provided very quickly.
'factor30' those Times articles you provided make it very clear that Gordon Brown and his former playmates in the Treasury or in HMRC have ensured house swaps are subject to stamp duty!
I shall...
All your answers were very helpful and provided very quickly.
'factor30' those Times articles you provided make it very clear that Gordon Brown and his former playmates in the Treasury or in HMRC have ensured house swaps are subject to stamp duty!
I shall...
21:28 Sat 02nd Jul 2011
House swaps like this used to be a way of avoiding stamp duty but I understand this loophole wa schanges when STamp Duty was renamed Stamp Duty Land Tax.
See this article as an example
http://property.times...ty/article3409410.ece
See this article as an example
http://property.times...ty/article3409410.ece
And another article in The Times says this:
"Home swapping first appeared in the UK in the 1990s, partly as a tax dodge. This was because, until a few years ago, most house swappers could avoid stamp duty. The Revenue cracked down on this relief in 2003 and once the exchange has been completed both parties now need to pay stamp duty on the full value of the property acquired and register the swap with the Land Registry.
The valuation for each property should correspond to the price that they would be expected to fetch if they were being sold. If you find a match at the same price, you can do a direct swap, otherwise one party will need to make up the difference.
Any attempt to fiddle the numbers to cut your stamp duty bill will be frowned upon by the taxman. Bill Dodwell, of Deloitte, the tax cosultancy, says: “A conveyancer will need to submit a stamp duty land tax form confirming that everything is correct. The conveyancer will probably insist that you provide valuations from at least two estate agents. The Revenue's district valuer will readily investigate if it suspects that something strange is going on.”
"Home swapping first appeared in the UK in the 1990s, partly as a tax dodge. This was because, until a few years ago, most house swappers could avoid stamp duty. The Revenue cracked down on this relief in 2003 and once the exchange has been completed both parties now need to pay stamp duty on the full value of the property acquired and register the swap with the Land Registry.
The valuation for each property should correspond to the price that they would be expected to fetch if they were being sold. If you find a match at the same price, you can do a direct swap, otherwise one party will need to make up the difference.
Any attempt to fiddle the numbers to cut your stamp duty bill will be frowned upon by the taxman. Bill Dodwell, of Deloitte, the tax cosultancy, says: “A conveyancer will need to submit a stamp duty land tax form confirming that everything is correct. The conveyancer will probably insist that you provide valuations from at least two estate agents. The Revenue's district valuer will readily investigate if it suspects that something strange is going on.”
Many thanks for both of your answers 'factor30' and also thanks for your answer 'CanisMajor'.
All your answers were very helpful and provided very quickly.
'factor30' those Times articles you provided make it very clear that Gordon Brown and his former playmates in the Treasury or in HMRC have ensured house swaps are subject to stamp duty!
I shall advise that couple and let them read the answers themselves.
It appears the only saving that could now arise would be that of Estate Agent fees.
Thanks again.
All your answers were very helpful and provided very quickly.
'factor30' those Times articles you provided make it very clear that Gordon Brown and his former playmates in the Treasury or in HMRC have ensured house swaps are subject to stamp duty!
I shall advise that couple and let them read the answers themselves.
It appears the only saving that could now arise would be that of Estate Agent fees.
Thanks again.
An unrelated thought occurs to me from factor30's article from the Times that “A conveyancer will need to submit a stamp duty land tax form .. will probably insist that you provide valuations from at least two estate agents .. The Revenue's district valuer will readily investigate if it suspects that something strange is going on".
Does that mean that when that lucky couple won the EuroLottery and gave their house to their house cleaner, that woman then had to pay stamp duty to get the conveyancer to change the ownership?
Does that mean that when that lucky couple won the EuroLottery and gave their house to their house cleaner, that woman then had to pay stamp duty to get the conveyancer to change the ownership?
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