View more on these topics

14. Stamp Duty Land Tax / Stamp Duty

The Chancellor made changes in the following areas in respect of Stamp Duty.


14.1.1 Residential Property

With effect from 17 March 2005, the long-standing threshold for stamp duty land tax (SDLT) on residential property has been doubled to £120,000. The other rate bands remain the same. The position is now as follows

Consideration for property Rate of SDLT
Up to £120,000 0%
£120,001 to £250,000 1%
Over £250,000 3%

There is no change to the higher threshold of £150,000 for residential transactions in designated disadvantaged areas.

14.1.2 Non-Residential Property

The exemption from SDLT for commercial land transactions in designated disadvantaged areas has been withdrawn with effect from 17 March 2005. However, the relief will continue for transactions entered into on or before 16 March 2005 but completed later.

14.1.3 Disclosure

The tax avoidance disclosure rules introduced last year apply to promoters of avoidance schemes aimed at avoiding income tax, corporation tax or capital gains tax. Now SDLT is to be added to the list where the property is non-residential property and its market value is at least £5m.

The rules will operate to schemes and arrangements made available or implemented on or 1 July 2005.

14.1.4 Anti-Avoidance

Measures are to be introduced, effective from 17 March 2005, which block avoidance schemes designed to avoid SDLT. These schemes cover

· Use of group relief
· Use of acquisition relief
· Grants of leases by bare trustees to their principal
· Certain variations of leases to remove restrictive covenants
· Use of repayable loans or deposits as consideration
· Reduction of market value by encumbrance
· Use of “sub-sale relief” in alternative finance transactions
· Use of partnerships

However, transactions effected in pursuance of contracts entered into on or before 16 Match 2005 will not be affected by the provisions, unless:

· There is a variation of the contract, or an assignment of rights under the contract, after 16 March 2005;
· The transaction is effected in consequence of the exercise after 16 March 2005 of any option, right of pre-emption or similar right; or
· After 16 March 2005 there is an assignment, sub-sale or similar transaction in respect of all or part of the subject matter, as a result of which a person other than the contracting purchaser becomes entitled to call for a conveyance.


In 1997 exemption from SDRT was given to mutually owned insurance companies that transfer investments as part of a restructure on demutualization. It appears that the changes made to stamp duty and SDRT since 1997 require that the law be amended in order that the relief continues to apply. The new measure will ensure that the transfer of investments in collective investment schemes from the mutual to the new company will continue to qualify for relief.


Evan Owen

The chief of the IFA Defence Union says terrorists have more rights than IFAs bec-ause of the Financial Services and Markets Act and he wants it overhauled but, while committed to fighting the IFA corner, he is also quick to ack-nowledge that those who flout the rules are indefensible.

Buyer straits

Mortgage brokers bearing the brunt of inflexibility of buy-tolet lenders are concerned that the sector may be heading for a significant fall.

DecisionDecisions appoints Managing Director

DecisionsDecisions, provider of online financial planning models for the investment market, has appointed Ian Horn as managing director. Horn brings experience of growth strategy and operations with Aegon and Scottish Equitable, and hopes to develop the companys potential further outside Europe.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm