Deputy prime minister Nick Clegg confirmed the 2012 Budget on 21 March will contain new rules to tackle tax dodging by the rich, following a government commissioned report in December which recommended adoption of a new general anti-tax abuse rule (GAAR) which is also intended to simplify tax collection.
Clegg said there was anger among a number of citizens at the way in which a ‘wealthy elite’ and large businesses employ accountants to dodge tax payments.
Exchequer secretary David Gauke reportedly specifically pledged to tackle Stamp Duty in the Evening Standard last night.
The decision to target super-wealthy homebuyers will please Liberal Democrat members of the Coalition who have been pushing for a “mansion tax” on £1m-plus London homes.
The Stamp Duty tax dodge often involves putting a high-value property in an off-shore company and trading the company instead of the property. In one example, while a family buying a £400,000 home is hit with a £12,000 bill, with homes worth more than £1m attracting 5% Stamp Duty, it is possible to legally avoid a £150,000 bill on a £3m property.
“It simply isn’t right that during tough times – when we’re trying to bring down the deficit – hard-working people pay their taxes in full while others avoid contributing their fair share through a range of elaborate schemes,” said Gauke.
