COULD ENGLAND AND WALES ADOPT SCOTLAND’S NEW STAMP DUTY ALTERNATIVE?
Current stamp duty bands are a constant source of debate in the UK, so England and Wales will doubtless be interested to learn that Scotland plans to fundamentally alter the tax in 2015.
The Land and Building Transaction Tax (LBTT), which will come into force in April, will mean anyone paying under £135,000 for their property will not be taxed at all.
Instead of the opinion-dividing ‘slab’ tax bands, Scottish buyers will now pay:
- 2% tax on any properties between £135,000 and £250,000
- 10% on any properties between £250,000 and £1 million
- 12% on any properties above £1 million
Crucially, the tax will only be applied to any amount that falls within the band, so a property purchased for £150,000 would only be taxed on the £15,000 that falls within the 2% tax boundary. This would mean a tax of £300, as opposed to £1,500 under stamp duty.
It is thought that this will mean 90% of buyers will either pay less or see their tax remain stable, and Finance Minister John Swinney is predicting a subsequent boost in the housing market north of the border.
However, the higher bands are causing concern in some quarters, particularly among those looking to buy inner city homes. The increased rates for properties above £250,000 have led to accusations that LBTT is a ‘mansion tax’.
While there is no indication that the change could be rolled out across the UK, it is likely that Westminster will be keeping a close eye on the situation, with some Conservative MPs already suggesting that the system would work well in London.
HOW FIDUCIA CAN HELP YOU DEAL WITH THE CURRENT STAMP DUTY SYSTEM
It is clear that many buyers are unhappy with the way stamp duty is at the moment, and find the structure of the pay bands unfair.
If you are purchasing a property, our stamp duty mitigation strategies can help you reduce the amount of SDLT you are required to pay. We consult some of the country’s top tax barristers to ensure all our work is legally compliant, allowing you to meet your obligations quickly and efficiently.
To find out more about our services, call Fiducia on 01625 599 200.