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Budget 2013 Stamp Duty Land Tax

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20 March 2013

Budget 2012 gave clear guidance that certain abusive SDLT avoidance schemes would be blocked retrospectively if they continued to be used.  Despite this, certain providers carried on with certain arrangements, whereby the sub-sale rules were exploited.  In the schemes, the purchaser sub-sold the property, with completion delayed for 125 years, in an attempt to avoid SDLT on the original purchase.

The Government has announced that changes will be made to the legislation to counteract these schemes with an effective date of 21 March 2012.

Stamp duty

With effect from a date to be announced (but expected to be 2014), stamp duty is to be abolished on share transactions in connection with junior markets, such as AIM.

Annual Tax on Enveloped Dwellings (ATED)

As announced in Budget 2012, a new charge, ATED, will apply for non natural persons holding a residential property valued at more than £2 million.  In addition, capital gains tax will also be levied on any gain made on disposal, at a rate of 28%.

There are certain exemptions from these charges, most notably in connection with property developers, charities, working farmhouses and properties held for employee accommodation.

If the property falls within the new regime, which applies from 1 April 2013, ATED charges are as follows:

Residential property value         Annual charge
£2million - £5 million                      £15,000
£5million - £10 million                    £35,000
£10 million - £20 million                 £70,000
£20 million plus                              £140,000

Capital gains tax will apply on disposals from 6 April 2013.


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