The Special Purpose Vehicle (SPV) - this has been a favorite of big developers and private development groups (James Caan Dragon Den between them). How it works A company or trust is established with the property as their only asset. The new owner acquires shares of the Company (the "SPV") instead of buying the freehold, as a transaction attracts a rate of 0.5%! James Caan is rumored to have bought and renovated properties in Mayfair, Chelsea and Knightsbridge, which sold to an SPV. Other multi-million pound properties were sold in Knightsbridge are also using a VPS.As an example of the massive savings to be had - with the help of a SPV as a vehicle for the purchase of a property of £ 6,950,000 can produce savings of £ 240,250.00 in SDLT (using the current rate of 4%). SPV and avoid SDLT is not new, the stories abound in the newspapers that accused Tesco of SDLT avoidance schemes in which 36 of its stores are in the hands of UK limited partnerships with Cayman Island registered members. Although the Finance Act 2010 was a way to block the SDLT tax evasion by the associations, the government runs shy to address the issue with companies.
Auto-build - buy land and build the house yourself! Only the parcel is taxed and not the cost of the final value of the property. Be careful though, this is not the same as buying land and buying a property off plan to go there. The latter is likely to be seen as two transactions by HMRC and taxed at full value set.
