Beware stamp duty trap
UK companies risk getting their fingers burnt if they don't fully investigate the introduction of the new stamp duty land tax proposed in the Finance Bill 2003, business lobbyists argue.
Link: Stamp duty claims against Revenue mount up
The new tax, which runs to 150 pages of legislation and offers the prospect of ten new statutory instruments, will be introduced on 1 December this year.’Businesses could wake up on 1 December and be faced with much higher leasing charges than they are used to,’ said Derek Brownlee of the Institute of Directors.
He warned the proposed changes had ‘not yet hit the radar screens’ of the institute’s members, but said he expected to be ‘sick of the sound of it’ by the time they did find out.
Mark Lee, head of tax at the Chartered Institute of Taxation, said the new tax could result in a 700% increase for many businesses. ‘This has the potential to depress the commercial property market,’ he said.
Because the government sees the leasing of property as a tax avoidance vehicle, the new proposals mean the length of a lease will effectively become irrelevant to the amount of stamp duty paid, negating the appeal of long-term leases.A spokeswoman for the Treasury said it would not consider delaying the introduction of the tax to allow for greater consultation.