Tuesday, March 20, 2012

Widows saved

Budget 2012: Lib Dems win stamp duty rise for scrapping of 50p rate of tax

LVT wasn't acceptable because the plebs would object, so it became a tax on mansions only. But they forgot to think about the poor widows, so it looks like it's now only a one-off tax on buying a mansion. Oh well.

Posted by phdinbubbles @ 09:37 PM (1693 views)
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14 thoughts on “Widows saved

  • Better than nout I suppose.

    The reason they have chosen this route is because the politicians and banker friends involved have already purchased their 2m+ properties and will not have to pay this tax personally.

    I will be eagerly awaiting to see the amount of stamp duty collected this time next year.

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  • The chancellor will also announce a crackdown on millionaires who pay the lower business rate of stamp duty of 0.5% by “enveloping” their property in an overseas company. Any residential property, inhabited by the owner or by tenants, will now face full stamp duty.

    How can they tell if it has been sold, if an overseas company was used?

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  • phdinbubbles says:

    As far as the effect on prices is concerned, won’t this just result in some people opting to buy smaller second homes rather than one big one, thus pushing less-than-2m house prices up and greater-than-2m house prices down?

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  • Osborne to Cameron: Has the horse bolted yet?
    Cam to Os: Yes, I think so.
    Os to Com: Right, I’ll close the stable door.

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  • @phdinbubbles – I am not so sure. I believe most of the multi-million pound houses in part are bought for ‘investment’ purpose as well as somewhere to live. Remember house prices only go up and all that.

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  • mark wadsworth says:

    It’s the most laughable tax hike of all time, SDLT is borne by the vendor anyway, so people buying a mansion aren’t affected, only those selling one.

    Let’s assume it’s 6% SDLT on homes selling for more than £2m and no avoidance (yeah right), there are about 100,000 of these which sell once every twenty years = 5,000 sales per year, that extra 1% per home = £20,000 (“I’ll ring for my liveried footman and have him bring it in freshly minted notes”) = £100 million extra revenue, a laughable amount compared to an annual deficit of £150,000 million and a drop in the ocean compared to what full-on LVT on residential could raise (especially if you got rid of all the bad taxes).

    But look on the bright side, that means that Kirsty Allslop will inherit £20,000 less when her hard pressed hard working parents shuffle off and she cashes in.

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  • Err.. Mark, in case you didn’t know, stamp duty is paid by the purchaser, not the vendor.

    Were it the other way round, it would be child’s play to close the offshore loophole – no money, no transfer of title..

    As to the numbers, there are currently about 120 properties selling each month for over £2m, with an average sale price that is thought to be in the order of £4m to £5m. The leaked proposal is for a rise to 7% from a current rate of 5% that is currently mostly avoided.

    So the actual increase in revenue is likely to be about 5% of £4.5m x 120 x 12 months of the year, or about £325m p.a.

    Put another way, that’s enough revenue to fund a £65 increase in the personal allowance – not a big deal.

    However, there are ten times as many properties selling for between £500,000 and £2,000,000, and there is probably a good measure of stamp duty avoidance in that sector that a rule change would claw back, possibly bringing the increase in revenue up to around £500m

    My guess is that when our George gets on his hind feet today, he will conveniently omit to say how much extra revenue he hopes to raise by this measure – he might mention the total revenue from stamp duty instead..

    Ultimately, this is just a sop to keep the LibDem thickos happy..

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  • mark wadsworth says:

    Uncle Tom, christ almighty do you think I was born yesterday, I KNOW that the legal obligation to pay the SDLT is on the purchaser, I work in tax, I know all about LEGAL obligations, I know ten times as much as most people including you, but the fact is that the ECONOMIC incidence is on the purchaser.

    There is absolutely no need to debate this as there is a huge wealth of evidence to show that when SDLT is reduced, selling prices go up accordingly.

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  • Strange to see the different reaction here – they’re in rapture about this over on the forum…

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  • MW,

    So if you knew, why did you make a post saying the exact opposite?

    You may work in tax, but I sure as hell wouldn’t want you as my accountant!

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  • mark wadsworth says:

    Uncle Tom, it is easy to prove somebody wrong by completely misquoting them, read what I said.

    I didn’t say “SDLT is PAID by the vendor” because that would be incorrect, I said “SDLT is BORNE by the vendor”, do you have even the faintest grasp of relative elasticities of supply and demand and how they affect the economic incidence of a tax? You can google these things. It is economic theory derived from real life and explains very accurately how things work.

    And no, I wouldn;t be your accoutant because you probably couldn’t afford me.

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  • clockslinger says:

    Words fail me. The true parasites, the cheating, lying, whining rich, get another non levy on their wealth again. F**k them, their rules and their laws.

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  • ‘What is your aspiration? I wish earn nuff money I can afford MW as my tax accountant’ :}
    incidently, at what level of income does it become economically worthwhile to get a tax accountant?

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  • UT

    just a minor point, transfer of land is by deed, so no payment is necessary. I can only assume that the Land Registry will be roped in to notify of all transfers otherwise avoidance will be the norm, yet many of the LR’s have been closed due to the reduction in transaction levels. Will the LR get extra staff to do the work?

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