The poor chancellor found it difficult to decide how to define the places qualifying for this relief, but after advice from his helpful elves he settled upon certain electoral wards. But some of those disadvantaged wards contain some very desirable commercial properties. So now, sales of those posh properties will be free of stamp duty, to the advantage of buyers and sellers who are probably not disadvantaged at all. Which perhaps is an illustration of a general point – that tax reliefs are a blunt instrument for engineering social change.
While he was thinking about stamp duty, the good chancellor realised there were some naughty tax avoiders who were organising their own version of the relief by arranging not to pay as much stamp duty as he wanted.
In the Budget, he announced how stamp duty land would be transformed to stop this kind of thing from 1 December. In particular, he will increase the stamp duty on leases by as much as eight times. He will also have a further look at partnerships. Meanwhile, the chancellor has applied sticking plasters to the old regime, especially stopping those who escape from stamp duty by hiding in a company.
- Kevin Griffin, director of the Ernst & Young Stamp Tax Group.