HMRC wins ruling over scheme claiming to cut stamp duty on homes

HM Revenue and Customs has won a key ruling concerning a tax avoidance scheme promoter which claimed to be able to cut stamp duty on property by up to 60 per cent.

The Revenue complained to the Advertising Standards Authority about what it claimed to be misleading advertising by CDP Tax & Wealth Limited, which trades as Fiducia Wealth and Tax, often referred to simply as Fiducia.

The ASA agreed with HMRC and ruled that the claims made by Fiducia were misleading and must be withdrawn.

The scheme claimed to use government-approved statutory rules to cut SDLT on residential property by 60 per cent - in reality, however, no SDLT is paid on the purchase at all and Fiducia keeps the balance of 40 per cent as its fee.

A statement from HMRC says its understanding of the scheme is that one exemption from SDLT is when mortgage providers they take a ‘security interest’ in a property as security on a loan. 

“Fiducia is selling a scheme which seeks to misuse this exemption through a complex series of transactions, so that no SDLT is paid. These types of arrangements fall under the meaning of ‘avoidance’ and go against the intentions of Parliament” says the Revenue’s statement.

The ASA ruled that claims made by Fiducia were misleading and must be withdrawn; the authority also ruled that the Fiducia website “misleads by omission” by failing to mention the many government tools and policies aimed at counteracting the avoidance being promoted through its scheme.

“The Fiducia website also failed to highlight that the SDLT scheme offered is a form of tax avoidance which HMRC is likely to challenge” the statement continued.

HMRC concludes by giving a blunt warning to anyone using this or similar schemes.

“You’ll be challenged by HMRC and will be charged interest on top of the SDLT due. You’re also likely to be charged a penalty for an inaccurate return. For transactions after 16 November 2017, you may generally be charged a penalty because of carelessness, unless you can show us you took reasonable care.”