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U.K. tax break for Muslims & Muslim posers

April 1, 2011

If you’re a Muslim, a new Muslim convert, or you’re willing to pose as a Muslim, you can obtain a valuable tax break when buying a house in the U.K. 

British homebuyers normally pay a stamp tax at the time of purchase.  However, if the property is immediately resold, the buyer is exempt from the tax.  This loophole was designed by the Labour party in 2005, which enabled Muslims to avoid the “evil” of paying home mortgage loan interest by selling their property to a company that then leases the property back to the Muslim occupant.  No interest is paid and no stamp tax is paid. 

Now, to the dismay of some British officials, the loophole is being exploited by those willing to behave like Muslims.  From the Daily Express on Mar. 21, with a hat tip to Islam versus Europe:

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.

Sultan Choudhury, from the UK Islamic Finance Secretariat, said: “It was certainly not envisaged that some tax advisers would manipulate the legislation on behalf of their clients to avoid paying stamp duty at all.”

Although it may not have been the intent, the policy is in harmony with Islamic tax law, which consistently requires preferential tax treatment of Muslims and inferior tax treatment for non-Muslims.

One comment

  1. Why does it make a difference whether the person is muslim or not? The fact is that it is utterly disgusting that muslims can buy property without paying stamp duty, any other sort of tax or interest. How dare the government raise stamp duty affecting everybody else to offset the losses caused by muslims? I am utterly disgusted with all parties for bringing it in, not preventing it and not ending it.



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