Net widens in stamp duty clampdown | AccountingWEB

Net widens in stamp duty clampdown

More property owners will be caught in the stamp duty land tax (SDLT) net after the Chancellor confirmed the limit would fall to just £500,000.

The Chancellor had already imposed the duty on all properties bought through a corporate envelope above £2m, but from midnight tonight this will fall to just £500,000.

This means that practically every property in London bought for investment purposes through companies will fall into the 15% tax bracket.

Osborne said in his speech: “Many of these are empty properties held in corporate envelopes to avoid stamp duty”.

Legislation will be introduced in Finance Bill 2014 to reduce the current threshold at which the Annual Tax on Enveloped Dwellings (ATED) bites from £2m to £500,000 phased in over the next two years.

In our live panel session during the Budget speech, tax editor Rebecca Benneyworth reacted to the...


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I assume property developers are exempt in some way?

awoodj | | Permalink

Do they make provision for property developers to avoid paying this and if so what criteria qualifies?

ireallyshouldknowthisbut's picture


ireallyshouldkn... | | Permalink

Why do you assume that? 

As I believe at the higher level they already do

awoodj | | Permalink

The reason I would assume it is because I believe it is currently the case for Property Investment(rental) and Development. However I have never dealt with it directly so thought I would see what the criteria was to qualify as this is more likely to catch people due to the reduction in values involved.

ireallyshouldknowthisbut's picture


ireallyshouldkn... | | Permalink

I cant see anything like that in the draft legislation. What document are you looking at?

ireallyshouldknowthisbut's picture

That's ATED, I thought your

ireallyshouldkn... | | Permalink

That's ATED, I thought your question was on stamp duty?

taxhound's picture

I have been looking for this too    1 thanks

taxhound | | Permalink

On HMRC's website it basically says that the ATED exemptions (for property developers etc) also apply for the higher stamp duty rate, so it should be ok. 

I believe ATED returns may still be required for all residential properties >£500k owned by companies (as I understand they currently are for properties >£2m), but you claim the exemption in the return - ie we will need to file annual returns for all of these companies and claim an exemptionin the return, otherwise a penalty may apply.


Higher rate for corporate bodies

From 21 March 2012 SDLT is charged at 15% on interests in residential dwellings costing more than £2 million purchased by certain non-natural persons. This broadly includes bodies corporate, for example companies, collective investment schemes and all partnerships with one or more members who are either a body corporate or a collective investment scheme. There are exclusions for companies acting in their capacity as trustees for a settlement and property developers who meet certain conditions.