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Residential Property Threshold
The threshold for stamp duty land tax on residential property has been raised from £60,000 to £120,000. As a result of this change, stamp duty land tax will not be charged on transactions in residential property if the consideration does not exceed £120,000. Where the consideration exceeds £120,000 but does not exceed £250,000, the 1% charge continues to apply. The change in threshold applies to transactions the effective date of which is on or after 17th March 2005. There is however no change to the £150,000 threshold for residential transactions in designated disadvantaged areas. When the stamp duty land tax regime came into effect on 1 December 2003, some contracts relating to land transactions remained within the old stamp duty regime. Where such a contract relates to a transaction in residential property, the stamp duty threshold is also raised to £120,000.
Disclosure Rules
FA 2004, ss 307-319 contain provision for the disclosure of tax avoidance schemes in relation to direct taxes. Those sections set out the general rules under which certain promoters and users of tax avoidance schemes must notify the Revenue about the schemes. Current regulations narrow the scope of the existing disclosure requirements to schemes and arrangements involving employment or the use of financial products where the tax advantage concerns income tax, corporation tax or capital gains tax. New regulations are to be made which will address schemes and arrangements involving stamp duty land tax. Promoters (or users, in prescribed circumstances) will be required to inform the Revenue of any schemes or arrangements intended to avoid stamp duty land tax on commercial property transactions. However, this is restricted to cases where the property has a market value of at least £5 million. The rules will apply to schemes or arrangements made available or implemented on or after 1 July 2005.
Commercial Disadvantaged Areas Relief
The stamp duty land tax relief for property in designated disadvantaged areas has been withdrawn for non-residential land transactions. The relief will no longer be available for transactions with an effective date after 16 March 2005. However, where a contract was entered into before that date, and completion or substantial performance occurs after that date, the relief will still be available. This is on condition that there is no variation or assignment of the contract, or sub-sale of the property, and that the transaction is not the exercise of an option or right of pre-emption. Disadvantaged areas relief is still available for residential transactions. |
