View more on these topics

Budget 12: 15% stamp duty for £2m homes bought through firms


The Chancellor has confirmed in the Budget that homes worth more than £2m will face a new Stamp Duty rate of 7 per cent, with 15 per cent levied on homes over £2m bought through a company.

The 15 per cent stamp duty will be effective immediately and aims to close down a loophole whereby properties owned by companies do not face stamp duty when sold.

Chancellor George Osborne has also announced it plans to consult on introducing a “large annual charge” on £2m homes which are already bought through companies.

Osborne said capital gains tax will also apply on residential properties through overseas companies, to ensure wealthy non-UK residents have to comply with the changes.

The Government has also issued legislation to close a loophole which allowed people to avoid stamp duty through sub-sales relief by putting their home in a trust.

Osborne said: “Let me make this absolutely clear to people. If you buy a property in Britain that is used for residential purposes, then we will expect stamp duty to be paid. That is the clear intention of Parliament.

“I will not hesitate to move swiftly, without notice and retrospectively if inappropriate ways around these new rules are found. People have been warned.”

Currently Stamp Duty kicks in at £125,000 and is charged at 1 per cent, rising to 5 per cent on properties worth over £1m. Rules around sub-scale relief have been exploited which were put in place to stop developers paying stamp duty twice. Once the home is bought it is transferred to a trust at a value below the £125,000 stamp duty threshold.

Osborne also spoke out against the practice of high earners finding ways to avoid paying tax.

He said: “It was the boast of some high earners that they were paying less tax than their cleaner. I regard tax avoidance as morally repugnant.”

Osborne said the Government will consult on introducing a general anti-avoidance rule in the UK, with the aim of bringing in legislation through next year’s finance bill.

The stamp duty move is part of a compromise between the Coalition parties to deliver a quicker rise of the personal allowance towards £10,000.

The rise in Stamp Duty will mean that the minimum tax on a property worth more than £2m will rise from £100,000 to £140,000. Stamp Duty on a property worth £5m will rise from £250,000 to £350,000.

For Money Marketing’s full coverage of the Budget click here.


Virgin Money to no longer offer fast track

Virgin Money is to no longer offer a fast track facility for mortgage applications. This means that all mortgage applications will now require income verification.   All pipeline applications already agreed on a fast track basis will be honoured, unless there is a material change to the case which takes it outside of fast track […]


FSA: Failed bank bosses could be banned from top jobs

The FSA is putting together plans which could see former directors of failed banks being banned from running financial institutions. The regulator’s business plan, published yesterday, says the FSA will is looking at a number of ways to make it easier to refuse an approved persons application. The FSA will set these out is a […]

MM Profile: Keith Churchouse

In 2004, the director of Chapters Financial used his background in banking, mortgage broking and independent financial advice to go it alone and now, with a new name, staff and ideas, he plans to expand business into new territory and make the most of opportunities resulting from the RDR
Interview by Rachael Adams

Royal London holds annual with-profits bonus rates

Royal London has held annual bonus rates across the majority of its with-profits products as the provider announced an increase in final bonus payouts. Annual bonus rates for Royal London policies have been held at 0.5 per cent for both single premium and regular premium business. Final bonus rates for Royal London single premium and […]


Britain's “Forgotten Army”: The collapse in self-employed pension membership – and what to do about it

Pension scheme membership among employees has risen by more than five million in the past four years because of the policy of automatic enrolment into workplace pensions. But Britain’s army of 4.4 million self-employed people, who account for one in seven of the workforce, are not covered by automatic enrolment. Pension coverage among the self-employed […]


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