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Homebuyers pay £1bn stamp duty bill in May – HMRC

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  • 21/06/2024
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Homebuyers pay £1bn stamp duty bill in May – HMRC
Homebuyers paid over £1bn in stamp duty land tax in May, the highest total for the year so far, government data showed.

Figures from HMRC showed this was up from a stamp duty intake of £957m in April and up on the £867m collected in May last year. 

To date, homebuyers have paid £4.42bn in stamp duty, only slightly down on the £4.46bn paid last year. 

The stamp duty threshold has been temporarily raised, meaning people buying a home worth less than £250,000 will not need to pay the tax. This will fall to £125,000 in March next year. 

Coventry Building Society has calculated that bringing the threshold down to this level will take the stamp duty tax bill on a home in England from an average of £2,411 to £4,911. 

First-time buyers currently only pay stamp duty if their home costs more than £425,000, which is set to drop to £300,000 in March 2025. 

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Stamp duty isn’t in all the party manifestos, but it’s certainly going to be near the top of the to-do list for whoever is Chancellor on 5 July. 

“In a matter of months, the temporary thresholds will expire and buying a home will become a lot more expensive. As it stands, someone buying an average-priced home in England next April will have to fork out an extra £2,500 to the taxman. 

“The ideal opportunity to act will be at the next Budget, which will likely be in September. Leaving it any longer than that will ratchet up the uncertainty and could distort the housing market as buyers and sellers seek to beat the deadline in March.” 

 

IHT intake surges 

Those paying inheritance tax (IHT) paid £1.4bn from April to May, some £200m more than the same time last year. 

The 16.6% increase comes as the IHT threshold remains frozen at £325,000 until 2028. 

Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, said it was inevitable that more estates would exceed the limit and therefore be liable to pay the tax. 

He added: “The silence from the main two political parties on inheritance tax is deafening, but this is something that is crying out for reform. It’s now affecting many more people than it was originally intended to. We’d also like to see it streamlined to make it as easy as possible for families to engage with.” 

Laura Hayward, tax partner at Evelyn Partners, said: “Inheritance tax receipts seem to be booming in this tax year, and after just two months, revenues are well on the way to a record total for the 2024/25 tax year. The 16.6% surge suggests that the next government will be taking significantly more from IHT whatever it intends to do with the tax or the reliefs around it.

“IHT has turned into a spectre at the electoral feast [that] no one really wants to mention by name, never mind grapple with. Labour named it once in their manifesto, confirming its pledge to end the use of offshore trusts, which is a matter affecting mainly non-doms.

“While the Conservatives promised to retain business-related reliefs, they made no other pledge on IHT, with not one mention of the word ‘inheritance’ in their manifesto – quite a climbdown from the situation less than a year ago when the possible abolition of IHT was being touted for the 2023 Autumn Statement.” 

She added: “Even if a new government is shy of making transparent and potentially unpopular decisions to tax the passing on of wealth more harshly, then fiscal drag is doing a similar job behind the scenes anyway.

“With both property and financial market assets continuing to surge in value, there is no prospect of the trend abating for more estates, and more assets in each liable estate, being dragged over the frozen thresholds at which IHT kicks in.”

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