In a bid to tap revenue from international investor interest in high-net worth UK property, the sprawling Finance Bill aims to clamp down on Stamp Duty evasion by obliging buyers to include Stamp Duty payments in tax returns.
Other proposals include an annual levy for non doms with homes worth over £2m, and an extension to capital gains tax, at 28%, for “non-residential, non-natural persons disposing of interests in UK residential property valued at over £2m.”
The annual levy will be, for properties valued at £2-5m, £15,000; for properties valued at £5-10m, £35,000; for properties valued at £10-20m, £70,000; for properties valued at more than £20m, £140,000.
The key measures:
Stamp duty land tax: transfer of rights – As announced in Budget 2012, and following consultation, legislation will be introduced to reform the SDLT rules for transfer of rights. The new legislation aims to ensure that SDLT will generally be charged only on the end purchaser of the relevant land, as under the current rules; but it also aims to provide clearer protection against schemes aiming to avoid this charge.
Annual residential property tax: As announced in Budget 2012, and following consultation over the summer, legislation will be introduced for an annual residential property tax to be payable by certain non-natural persons that own interests in dwellings valued at more than £2m. This tax will come into effect on 1 April 2013.
Stamp duty land tax (SDLT): 15% rate – Finance Act 2012 introduced a 15% rate of stamp duty land tax on the acquisition by certain non-natural persons of dwellings costing more than £2m.
Capital gains tax: extension to certain non-natural persons disposing of UK residential property valued at over £2 million – Legislation will be introduced to bring in a capital gains tax charge payable by certain non-natural persons when they dispose of interests in high value residential property in the UK on or after 6 April 2013.
For more, see the Finance Bill and a copy of the draft proposals.
The legislation will be open for technical consultation until Wednesday 6 February 2013.
