Revenue acts on abuse of stamp duty relief

wishiwasrich said:
Folks,
  • Building cost including VAT at 12.5% = £73,950
  • Building cost excluding VAT = £65,734
  • Land cost = £15,000
  • Total cost of house on which stamp duty is payable = £80,734
  • Total cost of house on which stamp duty is payable (euros) = €102,511
  • Stamp Duty payable = €102,511@3% = €3075
Yours Sincerely, etc etc
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There is also VAT on the Site. VAT applies to the full transaction. Therefore the stamp duty paid on the vat element of the site should not have been paid over - this amounted to €571 stamp duty. It needs to be looked at again. I have had this same argumenet with the stamp duty office in relation to the purchase of a house by a client for €144,000. I argued that this was below the threshold of €127,000 and was exempt. The Revenue said you knock the vat of the building cost and then add the value (gross) of the site. I pointed out that the builder also paid over Vat on the sale of the site. Our client was refunded the full amount of the VAT paid. Get an invoice of the developer and you will see that there was also vat charged to you on the site cost.
 
simplyjoe said:
There is also VAT on the Site. VAT applies to the full transaction. Therefore the stamp duty paid on the vat element of the site should not have been paid over - this amounted to €571 stamp duty. It needs to be looked at again. I have had this same argumenet with the stamp duty office in relation to the purchase of a house by a client for €144,000. I argued that this was below the threshold of €127,000 and was exempt. The Revenue said you knock the vat of the building cost and then add the value (gross) of the site. I pointed out that the builder also paid over Vat on the sale of the site. Our client was refunded the full amount of the VAT paid. Get an invoice of the developer and you will see that there was also vat charged to you on the site cost.
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Thanks for the feedback on this. We had a site cost of IR£15,000. If VAT on the site was, say, 20%, the cost less VAT would have been £12,500, reducing the amount on which 3% stamp duty was payable by £2,500. This in turn would have reduced the overall stamp duty by £75, or roughly €100. So we overpaid by €100. Does this make sense?
 
Vat on the site would have been at 13.5%. This would amount to €2,265. Stamp duty xtra paid of €68. Not worth bothering with to correct it, however the revenue should have pointed this out to you.
 
simplyjoe said:
Vat on the site would have been at 13.5%. This would amount to €2,265. Stamp duty xtra paid of €68. Not worth bothering with to correct it, however the revenue should have pointed this out to you.
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Thanks, might as well put in a phone call to them anyway.
 
According to a report in yesterday's Irish Times Revenue are extending this pilot scheme FTB stamp duty evasion investigation to a wider geographic scope (previously it concentrated on the greater Dublin area) and to a wider selection of cases (e.g. those with multiple properties, PAYE and self-employed). According to the report the pilot project found that 1 in 10 had evaded stamp duty on the original purchase or by ignoring the clawback liability.
 
Afraid not. I read it in the printed paper. I think it's premium content only on their website so only accessible to subscribers.
 
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