For those who didn’t get a chance to read yesterday’s FT here is a link to my exclusive about lawyers finding new ways to dodge the 7p stamp duty rate – which was introduced in last month’s Budget. The new duty was a compromise which fell some way short of the Lib Dems’ “mansion tax” idea; its political importance is that it was presented as a move to counteract the 50p tax rate cut.
If buyers find legal ways to get around the 7 per cent levy then that political argument may start to unravel, as we explain here.
One idea is for buyers to purchase an option on a home rather than the home itself. Another idea is to introduce a rolling lease (say of 10 years) which is renewed again and again. (This is explained in the box below the analysis). As one senior accountant told me:
“It’s like if you buy a cold Cornish pasty rather than a hot one. It’s not avoidance because they aren’t the same thing.”
Jim Pickard
Kiran Stacey