Stamp Duty Clawback

[ClubMan]

I thought I was doing everything by the book. I didn't know anything about Stamp Duty Clawback. If I had known about it I would have paid it on time. Now it appears my ignorance is going to cost me a lot in penalties.

Just shows that anybody getting into a business (in this case rental property management) that they know little or nothing about should really seek independent, professional advice about the tax and other issues involved.

 

[Howitzer]

There do seem to be a lot of similar posts to this, I wonder if Revenue may be open to an amnesty of some description in the foreseeable future?

 

[CCOVICH]

There do seem to be a lot of similar posts to this, I wonder if Revenue may be open to an amnesty of some description in the foreseeable future?

Why? The actual rules (as opposed to perception) seem clear to me-and I would like to know how anybdoy can reasonably claim otherwise?

Ignorance of the rules is no defence.

 

[Howitzer]

Why? The actual rules (as opposed to perception) seem clear to me-and I would like to know how anybdoy can reasonably claim otherwise?

Ignorance of the rules is no defence.

Certainly wouldn't argue with you but the precident set by all the amnestys of the last 10 years seem to indicate whenever there's a big lump of people caught out they like to give people the opportunity to pay their liabilities (+interest) without incurring penalties and/or prosecutions, whilst at the same time ensuring maximum publicity.

 

[CCOVICH]

Fair enough, I guess that makes sense.

 

[bazermc]

This post should me locked and made a sticky. It seems to be the most commonly asked on AAM, I have lost count of the amount of times I have seen this question being asked this year alone. I suppose it is indicative of our overheating property market.

 

[CharlieC]

So if somebody incurs the clawback and has to pay the investor SD rate, that means they have ceded their FTB status for ever more without ever actually benefiting from its SD exemptions.

 

[ClubMan]

Yes - they are no longer a FTB as far as SD on a subsequent property purchase goes regardless of the clawback. Although they can still benefit from FTB rates of owner occupier mortgage interest relief for a full seven years.

 

[liamwoods]

I am an owner occupier of a 2-bed apartment that I would like to rent out so I can go abroad to the states for a year or two, but I have only owned the property from new for 3 years. So I would be liable for SD clawback, I assume. The apartment would fetch about E1,300 per month if let out. What if I was to Rent the master bedroom under the rent a room scheme for about E800 and leave some belongings in the single bedroom(This would pay most my mortgage). I know this means the tenant(s) would lose their rights, but they would have a cheap one-bed apartment and we could make a verbal agreement that I would be away most of the year (wink-wink: all of it). Everbody wins? Would I get away with it though? It sounds like it is legal anyhow.

 

[CCOVICH]

I am an owner occupier of a 2-bed apartment that I would like to rent out so I can go abroad to the states for a year or two, but I have only owned the property from new for 3 years. So I would be liable for SD clawback, I assume. The apartment would fetch about E1,300 per month if let out. What if I was to Rent the master bedroom under the rent a room scheme for about E800 and leave some belongings in the single bedroom(This would pay most my mortgage). I know this means the tenant(s) would lose their rights, but they would have a cheap one-bed apartment and we could make a verbal agreement that I would be away most of the year (wink-wink: all of it). Everbody wins? Would I get away with it though? It sounds like it is legal anyhow.

Have a read of this long and interesting thread.

 

[ClubMan]

So I would be liable for SD clawback, I assume.

Yes - can't see how there can be any doubt at this stage!

What if I was to Rent the master bedroom under the rent a room scheme for about E800 and leave some belongings in the single bedroom(This would pay most my mortgage).

You can only avail of the rent a room scheme if you are an owner occupier. If you move abroad for a few years then it is unlikely that you could retain your owner occupier status.

we could make a verbal agreement that I would be away most of the year (wink-wink: all of it). Everbody wins?

Not if it involves illegal tax evasion. The state and other compliant taxpayers lose out and hopefully the evader does too eventually when they are caught. Please don't ask for advice on evading tax or engaging in illegal activities on AAM.

 

[liamwoods]

Thanks for the advice. I am only looking for a way to legally avoid paying stamp duty clawback. This is simply a theoretical option I have put to you so I can better understand my position. Under no circumstance would I put myself in a position where I may be liable for clawback or penalties.

The system just seems unfair, if I go abroad I will have to rent in the US. Renting out my place could leave me with a SD bill of about E25,000. Or I dont rent and I lose out on 15,600 potential rent in one year (plus I pay my mortgage) or I have to sell up and off the property ladder. All I want to do is live abroad for a year and now I can't because all of these options leave me skint. Guess I just need more money.

 

[CCOVICH]

The system just seems unfair, if I go abroad I will have to rent in the US. Renting out my place could leave me with a SD bill of about E25,000. Or I dont rent and I lose out on 15,600 potential rent in one year (plus I pay my mortgage) or I have to sell up and off the property ladder. All I want to do is live abroad for a year and now I can't because all of these options leave me skint. Guess I just need more money.

It could be argued to be unfair if you 'have to' go to the US for a period of time for work, but not if it is your choosing.

If you are travelling for work (as opposed to a working holiday), the info in this post, which I linked to above, maybe of interest.

 

[liamwoods]

Thanks CCOVICH, had a long read through your last link. I am fairly certain there is no way around this for people in my situation. Guess I will have to wait the full 5 years but I'm young now and who knows, by then I might have serious commitments. Pity!

 

[ClubMan]

Thanks for the advice. I am only looking for a way to legally avoid paying stamp duty clawback.

So why these comments then?

we could make a verbal agreement that I would be away most of the year (wink-wink: all of it). Everbody wins? Would I get away with it though?

The system just seems unfair, if I go abroad I will have to rent in the US. Renting out my place could leave me with a SD bill of about E25,000. Or I dont rent and I lose out on 15,600 potential rent in one year (plus I pay my mortgage) or I have to sell up and off the property ladder.

After most likely pocketing a tax free capital gain. Hardly penal.

 

[liamwoods]

Clubman.You have taken these quotes of mine out of their chronological order and only taken the pieces that suit your point. My "wink-wink" comment was followed immediately by "sounds legal anyway?" OK I admit It sounded devious. Also if I thought I would get away with it, I would be very tempted but the stress and worry of it catching up to me just isn't worth it.

So why these comments then?


After most likely pocketing a tax free capital gain. Hardly penal.

What do you mean?