Rich root out stamp duty loopholes Wealthy homebuyers have already found loopholes to avoid paying the top stamp duty rate, less than a month after George Osborne introduced a higher levy as the centrepiece of his Budget. Tax lawyers are devising schemes to help those affected by the tax - which was raised from 5 to 7 per cent on houses worth more than £2m - to get round paying it. The chancellor also closed down a popular scheme, under which properties were bought and sold via offshore corporate vehicles, by imposing punitive 15 per cent stamp duty on such structures. One of the new avoidance schemes, marketed by a handful of London-based solicitors, involves buyers signing multiyear leases that are automatically renewed on a rolling basis. As the value of each lease is much less than the freehold of the house, the top rate of stamp duty can be circumvented. "This is what a lot of wealthy buyers are looking at at the moment," said one person familiar with the scheme. Even a [long-term] lease ... would drop below the £2m threshold. The government had predicted it would net an extra £150m in the next financial year from the increase, and Mr Osborne has described people who use such loopholes and artificial buying structures as "morally repugnant." The chancellor has warned that he will clamp down on any scheme that tries to exploit weakness in the tax system. "It is just a reality that a lot of people will look at getting round [stamp duty] before they buy," said a senior tax lawyer specialising in stamp duty. Another lawyer told the FT he had helped a client get round the 7 per cent by selling a third party the right to purchase the property at a future date. The scheme was originally devised as a way to exempt legitimate intermediaries, such as developers, to pass stamp duty costs to a new property's first owner. "It doesn't surprise me that there are people out there looking to get round the 7 per cent rate with these kind of schemes," said David Saleh, UK head of real estate tax at law firm Clifford Chance. But they are playing with fire. The industry should not be focused on devising, marketing or selling aggressive stamp duty avoidance schemes to homeowners, and buyers should beware about using them. The Solicitors Regulation Authority has warned solicitors that they risk being struck off from the profession if they are caught helping housebuyers avoid stamp duty. "We would look very closely at the conduct of any firm actively involved in these schemes," said Richard Collins, SRA executive director. Buyers of property are free to use honest and proper tax planning to mitigate their tax liability but there are a number of risk and misconceptions surrounding stamp duty land tax schemes.