Budget 2012: Chancellor closes loophole in stamp duty land tax
News article published on: 20th June 2012
Today the Chancellor, George Osborne, introduced two new changes to stamp duty land tax (SDLT) to close a loophole in SDLT tax avoidance and tax those buying high value properties.
SDLT avoidance has occurred by buyers setting up a limited liability company to purchase property.
SDLT is paid on the initial purchase at the same rate as if it were an individual, but SDLT may be avoided by future purchasers when the company decides to sell the property. This is done by the owner selling shares in the company rather than the property itself. The property is then immediately sold back to the individual.
From tomorrow the new SDLT brackets will be as follows:
£125,001 to £250,000 1%
£250,001 to £500,000 3%
£500,001 to £1million 4%
£1,000,001 to £2million 5%
£2,000,001 and over 7%
Properties over £2million
and purchased via a company 15%
The jury is out as to how many buyers these two new brackets will affect as only 0.2% of properties purchased in November 2011 accounted for those purchased over £2million.
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