View more on these topics

IFS: Stamp duty changes highlight need for property tax rethink


The Institute for Fiscal Studies says the changes to stamp duty announced in the Budget appear “unpremeditated” and bolster the case for wholesale reform of property taxation.

Last week, Chancellor George Osborne announced a new 7 per cent stamp duty band for properties worth over £2m and a 15 per cent band for any property bought through offshore firms.

Giving evidence in front of the Treasury select committee this morning, IFS director Paul Johnson said the policy seemed “unpremeditated” adding it reinforced the case for a review of property taxation.

He said: “It increases substantially the need for reviewing the taxation of property, thinking about the structure of council tax, whether we continue to use 1991 prices, whether we continue to charge it in a way which rises much less proportionally than the value of the property and whether we want to continue with transaction tax which has an impact on how the market works.”

The Treasury says the new 7 per cent rate will hit around 3,000 property sales a year and bring in £200m to £300m. The Office for Budget Responsibility’s economic and fiscal outlook, published alongside the Budget says this estimate is “highly uncertain”. However, Johnson said he has “no basis” for doubting the Treasury’s estimated revenue.

In his Budget speech, Osborne warned he would act “without notice and retrospectively” against people seeking to avoid stamp duty. Chartered Institute of Taxation policy director John Whiting warned that there was a “genuine risk” that retrospective action could become the norm if politicians begin to use it, especially as a way of “correcting lazy legislation”.

He said retrospective action should be kept “in a very very tightly controlled box” as it risked damaging the reputation of the UK tax system and could make inward investment less likely.

He said: “It damages it because it takes away some of the reputation for stability, certainty and fairness that in many ways are the cornerstones of our system.”


MMR too focussed on brokers, says BSA

The Building Societies Association has criticised the mortgage market review’s stance on full advice as being too focused on brokers, with lenders an afterthought. It warns that there could be a risk that consumers may become less engaged if they are forced to take advice even if they do not require it and pay less […]


Chris Gilchrist: The collapse of financial theories

Most of us have some painful memories of the 2007-08 crunch. It is not surprising that most people in the business are keen to forget and to resume business as usual. This will not happen and if you believe it is happening now, you are heading for trouble. One of the reasons we had the […]


FSA refuses to back down on simplified advice

The FSA has refused to relent on its stance on simplified advice, saying it will carry the same liability and have to meet the same qualifications and adviser charging rules as full advice. The regulator has published its final guidance on simplified advice today, following a consultation paper last September. It states the suitability standards […]

Aegon head of corporate media to leave

Aegon head of corporate media Lesley McPherson is leaving the firm after 12 years. McPherson will leave later this year with Mark Locke appointed as head of media relations. McPherson says: “Aegon UK is now in a positive new development phase and I’ve decided it’s the right time for me to seek a new career […]

Three stocks due a Brexit boost

By Mark Martin & Holly Cassell, Neptune Mark Martin and Holly Cassell highlight three high-conviction holdings in the Neptune UK Mid Cap Fund that they believe are well positioned to benefit from Brexit. Read more Important information Investment risks Neptune funds may have a high historic volatility rating and past performance is not a guide […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. We need to have a tax on land itself it will raise over 100bn per year and result in more efficient farming leading to less waste and cheaper food it will also free up investment capital to be used for manufacturing or retail development

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