Stamp duty

The promised reform of stamp duty continues with a view to updating the framework of the 300 year old duty and supporting the introduction of paperless electronic conveyancing.

Proposed changes include:

  • from 1 December 2003 the stamp duty zero rate band threshold will be increased to £150,000 (from £60,000) for commercial property
  • from 1 December 2003 abolition of stamp duty on transactions involving property other than land, shares and interests in partnerships
  • a new regime for leases, with a 1% charge on the net present value (NPV) of rental payments, with exemptions for most residential leases and exemption for commercial leases if the NPV of rents over the life of the lease does not exceed £150,000
  • a number of anti-avoidance measures to discourage the transfer of properties into companies or partnerships and the onward sale of the shares or interest in the partnership to third parties.

Disadvantaged areas

Exemption from stamp duty on all property sales up to £150,000 in ‘disadvantaged areas’ has been in place since 30 November 2001. There are almost 2,000 such areas and details can be found on www.inlandrevenue.gov.uk/so

From 10 April 2003, stamp duty is abolished for all transactions in commercial property within the designated disadvantaged areas.

Comment

Once again the threat of increased stamp duty rates has not materialised.

The abolition of stamp duty on transactions involving property other than land, shares and interests in partnerships will take many transactions out of stamp duty altogether, significantly transfers of book debts and other receivables.