I was going to call this simply “Stamp Duty news”. But that’s not the most exciting topic ever. Unless you are buying a house.
Or unless you are me.
So on to the news:
1. DV3 v HMRC
This was the tax planning case I’ve referred to in previous posts. The taxpayer appealed against HMRC’s assessment that stamp duty land tax (SDLT) planning (involving the sale to a purchaser followed by a subsale into a partnership) failed.
The decision was highly technical and involved an in-depth analysis of the SDLT subsale rules.
The taxpayer won in the tribunal. It seems likely that HMRC will, however, appeal.
2. Shariah compliant SDLT scheme blocked
In the budget, HMRC have changed the rules for subsales and alternative property finance relief to block an increasingly popular method for avoiding SDLT.
3. 5% rate
The rate of SDLT for residential property purchases OVER £1m with an effective date on or after 6 April will increase to 5%. Following on from the above 2 points, this is likely to lead to an increase in SDLT planning.
4. Bulk purchases
As from Royal Assent of the Finance Act 2011 a new relief will be introduced for purchases for multiple residential properties. The terms are not yet finalised, but in essence where you are purchasing several plots or properties you would take the total price and divide by the number of properties to find the mean. The rate of tax will be based on the mean price.
Since opportunities for abuse abound, there will probably be some restrictions imposed.
5. First time buyers
HMRC will review how this relief is working and report on it in the Autumn.
If any of these changes affect you or if you would like to contact someone about stamp duty, please drop me a line.