Correcting over zealous anti-avoidance rules for investment partnerships
Parliament could have stopped this particular problem when FA 2007 was at the debating stage, if there had been any time for any meaningful debate. Happily for all concerned the Treasury listened to the pleas of property investment partnerships and has amended anti-avoidance rules which were brought in last year and accidentally created a tax charge when an interest in property was transferred between partners.
The measure is retrospective and applies to transactions that occurred on or after 19 July 2007.
Ad valorem stock transfers
Ad valorem stamp duty on stock transfers where consideration is £1,000 or less is to be exempted on or after Budget Day 2008. The duty is normally calculated at 0.5% of the consideration given, and means that any transaction of £1,000 or less attracts a deminimis duty of £5 and the transfer or other instrument must be presented to HMRC for stamping.
The measure will, says its pre-budget report note, result in approximately 220,000 low value instruments being removed from the stamping process. It is thought that many low value instruments may never been stamped and no duty ever paid, and so this is a very sensible measure.
Change in notification thresholds for land transactions
As from Budget 2008, transactions involving residential and non-residential property where the chargeable consideration is less than £40,000 will no longer need to be notified to HMRC.
Leases will have to be notified when the lease is for a term of seven years or more and where any chargeable consideration is more than £40,000 and the annual rent is more than £1,000.
This measure will also apply to linked transactions where the chargeable consideration is less than £40,000.
Sources: Pre-Budget Report Notes 20, 21 and 22
Pre-Budget Report 2007: At a glance guide
Pre-budget coverage sponsored by