Stamp duty on purchase of a business

C

Chas

Registered User
Messages
55
What would the stamp duty payable be on the purchase of a business made up as follows...
Remainder of lease - 2years 3 months at 1810 per annum (although a right to a 35 year lease was negotiated)
Contents (Machinary to operate business but these are I hope being treated as passing by delivery) - 25300
Goodwill - 90600
Total valuation od business 115000

Revenue figure at moment is 6367 with the following disclaimer - Assessment does not include contents passing by delivery, however duty is payable at the higher rate.

From what I can work out they are charging 7% on 90600 plus 2 x 12.50. Yet the rate in the revenue booklet is 6% from 80001 to 100000. i.e. they are charging me an extra 906.

Is there any way of mitigating any of this duty?

Conversely would the seller be liable to capital gains (or any other taxation) on the sale of the business he built up from scratch?
 
There is a way of avoiding incurring stamp duty costs

You should talk to your solicitor about a verbal contract witnessed bu both solicitors

It is still an enforceeable contract but since there is no signing it does not have to be stamped and therefore no stamp duty payable

It is completely legal and nopt tax avoidance just a simple way of enacting a contract without stamp duty

Stuart
 
And how ( and what) does the purchaser ultimately sell on unless there is something in writing - a note or memorandum for the purposes of the Statute of Frauds? Verbal may sort out stamp duty but it does not resolve commercial reality.

mf
 
I can understand stamp duty being payable on the lease, which is a physical document, which was valued at €540 for the remaining 27 months. The machinary is exempt from actual duty as goods passing by delivery, although revenue are using their value to increase my liability to 7% on the goodwill portion, by moving me up a band from 6% to 7%.

If Stamp duty is a duty on the stamping of documents, other than the lease, what is actually being stamped? I operate a service/retail business from the "leased" shop and also a "van run".

Can the goodwill of a business be stamped? I like this idea of a verbal agreement, although we may have gone to far at this stage since the solicitor has gone down a different route and the revenue are involved.
 
Apologies I re-read my post

I understand it must be a written contract but verbally accepted

But you should talk to your solicitor, mine done it when we were purchasing goodwill only

I do not know the exact details I left that to the solicitor

Stuart
 
Is there any merit to these statements regarding ways to reduce or navigate legally around stamp duty for commercial purchases?
 
Stamp duty is a tax on documents - no document and no duty. However there is significant commercial risk as you don't have written title to what you have just bought. Additionally, a written offer/oral acceptance is a complex enough transactions - the additional legal fees on converting the business sale agreement will make inroads into any saving on stamp duty. There is also the danger that some document can be deemed to be a conveyance on sale and stamp duty can apply. If this were me I'd pay the stamp duty. Stamp duty is 7.5% of the amount liable.
 
Sounds bizarre, claiming to have taken ownership of something but never being able to create a document that might evidence that and risk stamp duty, 7.5% is not a small amount for SME or big corp! IIs this even a thing in reality? Is it akin to the guys having their houses repossessed shouting about common law?
 
You must log in or register to reply here.
Back
Top