A Case of Stamp Duty Overcharging
August 23, 2024
A property investor recently purchased 11 properties at auction for a total of £660,000. Eager to minimize his Stamp Duty costs, he sought advice from a tax firm called "Save my tax." They quoted him a fee of £7,000 to reduce his tax liability from £40,000 to around £20,000.
Feeling confident in their expertise, he accepted the offer. However, after the transaction was complete, he decided to double-check the calculations with Compass. To his surprise, Compass informed him that due to purchasing over 6 properties simultaneously, the transaction was automatically classified as commercial/mixed use, which carries a different Stamp Duty rate.
The correct Stamp Duty calculation based on this classification was £22,526. John was relieved to learn that he had not only saved money compared to the quote from "Save my tax" but had also paid the correct amount of tax.
This experience highlights the importance of thorough research and expert advice when dealing with Stamp Duty. While seeking to reduce costs, it is essential to ensure that the advice received is accurate and compliant with the relevant tax regulations. In this case, the property investor's decision to seek a second opinion with Compass proved invaluable, saving him a significant amount of money and ensuring that he met his tax obligations.
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