Newspaper article The Evening Standard (London, England)

Stamp Duty Scam

Newspaper article The Evening Standard (London, England)

Stamp Duty Scam

Article excerpt

THE CHANCELLOR made great play in his last two budgets of raising the threshold at which stamp duty is payable, a gesture aimed at first-time buyers.

Yet the threshold and subsequent higher rates in the tax have lagged behind the rise in house prices on a dramatic scale. In London, this means that the top band alone

properties changing hands at above [pounds sterling]500,000

is generating about [pounds sterling]500 million a year.

This is bad news for most homebuyers. Yet the very wealthy, by contrast, as we report today, have a simple way out of paying this tax. They transfer properties to offshore trusts, reducing the bill from four per cent to the 0.5 per cent corporate rate.

This is perfectly legal as things stand. However, the news that ordinary homeowners pay heavily, while the very rich pay virtually nothing, will be a source of resentment. It comes at a time when many wealthy foreigners enjoy the benefits of London life while using "non-domiciled" status to avoid making any direct contribution to the Chancellor's coffers. It may be difficult to distinguish between homes and business assets legitimately owned by overseas companies, but that is what the Treasury must try to do.

And while officials are considering the matter, they should also look at raising stamp duty thresholds as paid by the majority in London and the South-East.

The [pounds sterling]125,000 threshold has become meaningless with so few properties available in the capital below that price in any case. As this paper has pointed out before, Mr Brown has good political reason to begin a charm offensive towards London and the South-East if he hopes to retain power. Acknowledging the reality of London house prices by raising the stamp duty threshold to realistic levels would be a start..

THE CHANCELLOR made great play in his last two budgets of raising the threshold at which stamp duty is payable, a gesture aimed at first-time buyers. …

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