U.K.: Home buyers posing as Muslims to avoid stamp tax under Sharia

The convoluted, Rube Goldberg-worthy process described below, which affords preferential treatment to those who invoke Sharia, lends itself to any number of foreseeable abuses. Here is one. "Islamic law used to dodge stamp duty," from the Daily Express:
Sharia law is being used by house buyers posing as Muslims to dodge stamp duty, it was revealed yesterday.
A scheme, brought in by Labour in 2005, allows followers of Islam to buy property without paying the tax.
Paying interest is banned under Sharia law, so Muslims are allowed to buy a house and then sell it on to an offshore financial company.
They then lease the house from the company instead of taking out a mortgage, which would include interest payments. Stamp duty, which is applicable to all properties worth £125,000 and over, does not have to be paid on properties which are immediately sold on. But the loophole, which costs the Treasury £40million a year, is now being used by some who pretend to be Muslim.


Liberal Elite said...

This is a somewhat deceptive posting.

This has ZERO to do with Sharia law.

It has EVERYTHING to do with tax exemptions for "religious" organizations.

When a church buy a piece of property, it should pay all taxes. That fact that it doesn't can and has lead to all sorts of scams and abuses. (... But that's the core of organized religion anyway: **scams and abuses**).

You want to avoid paying taxes too? Lease your home from a church and call it a place of worship.

Anonymous said...

"You want to avoid paying taxes too? Lease your home from a church and call it a place of worship."

Wrong. If you rent your house from a church, they still have to pay property tax. The only exemption is for rectories. Churches have to pay taxes on any usage of church property that is for profit (preschool by a third party). This stamp duty is like selling an LLC which has only one asset, a piece of property, to avoid paying a transfer tax.

Anonymous said...

Le is wrong again? Shocking.

Liberal Elite said...
This comment has been removed by the author.
Liberal Elite said...

@5:24 "Wrong. If you rent your house from a church, they still have to pay property tax. "

I believe that you are misinformed. The Church will not need to retroactively need to pay a transfer tax if it leases its property after purchase.

We're talking about transfer taxes here. You're confusing this with ordinary annual property taxes.

Fawn Liebowitz said...

You are boring enough without giving additional borderline questionable tax lectures.

Haiku Lou said...

bad carp still swim here.
even though tide tells swim back.
perhaps fish may learn.

Anonymous said...

LE, you don't pay transfer tax if you lease a house. That is because you will never own it. The Muslims or fake Muslims will one day own the house. It is basically rent to own for Muslims.

Anonymous said...

I don't think so. Real ownership is never recorded, so technically, the religious organization remains the true owner in every legal sense


Quoth the raven-eat my shorts... said...

I like you better in lower case letters, where you belong. it is like de facto contrition from your type of dogmagtic mess. Please continue to mis-understand your own practice of understanding the law or religion or music or culture or your understanding of a proper haircut.

Liberal Elite said...

The obvious solution is to make religious organizations pay taxes like everyone else. Why should the general taxpayer be asked to pay for other people's religious beliefs??

noanonymousguesses said...

A church is a place for like minded individuals to meet and share their beliefs. Most churches in this country have very small congregations and struggle to keep their doors open.

Liberal Elite said...

So if I want to form a social club with some friends to share beliefs and to think noble thoughts, you're OK with helping to pay for that with your tax dollars?

...didn't think so.