George Osborne confirmed this weekend he will be “coming after” Stamp Duty avoidance with aggressive new measures in Wednesday’s Budget.
He said buying homes through a company to avoid the tax was “unacceptable” and pledged to “come down on that practice like a tonne of bricks”.
“Rich people, often foreigners who come to this country, but also some people here in Britain, who put homes into companies to avoid Stamp Duty – that is completely unacceptable,” Osborne said on BBC One’s The Andrew Marr Show.
Osborne is expected to use the Budget to announce he is cutting or axing the 50p top rate of tax.
Speaking on The Andrew Marr Show, he said he did not want to go into specifics but said it would be a “Budget for working people”.
Speculation has suggested it will be cut to 45p from April 2013 (Financial Times, Sunday Times, Telegraph), or even 40p (Guardian).
Osborne is also expected to raise the personal allowance from £8,100 to about £9,000 (The Times). This will accelerate the timetable for it reaching the £10,000 in the coalition agreement.
A new “general anti-avoidance rule” which will allow the tax authorities to recover money saved by any scheme which is deemed to have been set up simply to avoid tax will be announced (The Telegraph).
Osborne has already cut corporation tax to 25% from 28%, but will set a target of 20% for later years (Sunday Times).
Asked about the plan to stop child benefit payments to parents paying the 40% higher rate of income tax, Osborne said it was right that each section of society made a contribution to tackling the budget deficit but “how we implement the policy is something we will discover on Wednesday” (BBC).
Pensions tax relief
The Chancellor is under pressure to cut pensions tax relief for those earning more than £150,000.
Shadow Chancellor Ed Balls last week called on the coalition to use the Budget to cut the tax relief on the highest-earners from 50% to 26%.
He said the move would help low and middle income earners and raise at least £1.25bn, allowing Osborne to reinstate working and child tax credits that were cut in the Autumn Statement.