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February 26, 2012 8:29 pm
George Osborne signalled that he will use next month’s Budget to crack down on stamp duty avoidance by people buying and selling homes.
The chancellor of the exchequer said in an interview that he found it “unacceptable” that “wealthy people” were able to avoid the levy.
“We’ve already taken measures to make sure the tax system is fairer,” he told Sky News. “I increased capital gains tax for wealthier people in my first budget and I have taken action on stamp duty avoidance and that’s something we are definitely looking very closely at now.”
People buying a home worth more than £1m have to pay the upper level of stamp duty at 5 per cent, while homes in the £500,000 to £1m bracket attract a 4 per cent levy.
Many people dodge the tax by transferring the deeds to offshore companies, which are then bought by the purchaser – a ruse estimated to cost the Treasury up to £1bn a year.
Mr Osborne will announce a crackdown in the Budget, although officials admit the move is unlikely to raise anything like the £1bn figure. “This won’t be a big revenue-raiser as the best estimates of the lost revenue are not that big,” said one Treasury source.
Nick Clegg, deputy prime minister, recently called for an end to “industrial-scale tax avoidance” to help increase the threshold at which low earners start to pay tax – a totemic pledge for Liberal Democrats.
Ministers are concerned that law firms and specialist websites help homebuyers use the legal loophole to avoid paying stamp duty.
Separately, Mr Osborne said on Sunday that the government would publish an Inland Revenue study into the 50p upper income tax bracket on the day of the Budget.
The result will be closely watched by those advocating that the 50p rate be scrapped because it simply encourages the well-off to use avoidance measures.
Meanwhile, Mr Osborne said Britain would not hand over extra funds to the IMF until eurozone countries committed further resources.
Speaking at the G20 event in Mexico, he said: “I don’t think you’re going to see any extra resources committed here because eurozone countries have not committed additional resources themselves, and I think that quid pro quo will be clearly established here in Mexico City.”
Mr Osborne also stood by his decision to rule out any further duty cuts for motorists, revealed in Saturday’s Financial Times.
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