In August alone, the stamp duty bill was £1.3bn, a slight fall on the previous month’s £1.4bn. Coventry Building Society suggested that following speculation around changes to property tax, which first started on 18 August, the amount paid during the month could have been a peak for the year.
There have also been reports this week that the government is considering allowing people to pay stamp duty in instalments over years instead of an upfront cost. Coventry Building Society said this would ease costs, but with the budget yet to take place, it added more uncertainty.
Since the start of the tax year in April, £6bn has been paid in stamp duty, up from £5.3bn during the same period last year.
Stamp duty reform needs to be considered carefully
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Nobody wants to be the last one to pay the old tax. If people think they could save thousands under a new system, or even spread the cost over time, some may choose to hold off buying until there’s more clarity.
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“The idea of shifting the burden from buyers to sellers, or allowing staggered payments, would be a significant shake-up, and for many buyers it would remove one of the biggest barriers to owning a home. But speculation can make the housing market hold its breath for a minute while people wait to see what happens.”
He added: “Any reform needs to be carefully thought through to avoid any unintended consequences. Passing the tax to sellers could make people at the top of the chain think twice about moving, while staggered repayments could affect how much people can borrow.
“Reform has to strike the right balance so that it supports buyers, keeps sellers in the market, and helps the housing market keep moving.”
IHT receipts jump £200m annually
Inheritance tax (IHT) receipts between April and August came to £3.7bn, £200m higher than the previous year.
Stephen Lowe, director at Just Group, said: “Today’s IHT figures prove the two certainties in life – death and taxes. And with rising asset prices, frozen thresholds and last year’s reforms, IHT looks set to deliver a bumper tax take for the fifth year in a row.
“As the Chancellor continues to feel the fiscal pressure, and having ruled out hikes on major taxes, she will want to explore all her options to raise revenue. Given IHT targets those who are wealthiest in society, it’s entirely possible that it will once more be in the Chancellor’s sights.
“With more estates being subject to IHT, and the prospect of further changes to the rules on the horizon, it is important that people keep track of the valuation of their estate, including a recent assessment of their property wealth.”
Will Hale, CEO of Key Advice and Air, said the figures were a reminder that “money that is leaking from estates and the importance of good financial planning in order to protect wealth for the next generation”.
He added: “Whilst part of the reason for the increase in IHT receipts is down to recent rises in asset values, which is a positive for customers, it should be remembered that the government has consistently chosen to maintain tax-free thresholds at their 2020 to 2021 levels. Judging by the ‘kite flying’ that is taking place in advance of the November Budget, there must be a high likelihood that not only will these tax thresholds be left untouched, but also further measures implemented to boost public finances through increasing the tax take upon death.
“Tax planning must not be the preserve of the high net worth. It is imperative that all families seek advice and, given that £3.7trn of property wealth sits in the hands of the over 55s, that this advice includes a consideration of all options for reducing the IHT liability – including modern later life lending solutions such as lifetime mortgages.”
