Lawyers have given a cautious welcome to stamp duty land tax reforms announced in Chancellor George Osborne’s Autumn Statement.
As of 4 December, stamp duty applies only to the part of the price that falls within the band. Buyers will pay nothing up to the first £125,000, 2% on the next part up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% on anything above that.
Gary Richards, partner at Berwin Leighton Paisner, says: “The public will welcome the long-overdue reform, moving away from a slab system but there is a danger that this will slow down residential activity at the higher end of the housing market.
“London’s status as a real estate capital could be jeopardised. This is effectively another name for a one-off mansion tax.”
Kyra Motley, private client associate at Taylor Wessing, says: “This will have a dramatic impact on prime central London, high value residential property in both the immediate and long term future.”
Other changes include allowing spouses to inherit their deceased partner’s ISA tax-free, tax free annuities for dependents of those who die under the age of 75, a new 25% tax on profits generated by multi-nationals that have moved out of the UK, withdrawing unemployment benefits from migrants who have “no prospect” of work after six weeks, and abolishing national insurance for apprentices.
Neal Todd, partner at Berwin Leighton Paisner, says: “The new 25% tax on profits leaving the country makes the UK a less competitive place to do business. After years of bringing business back to the UK it seems as though the Chancellor is pandering to the populist attacks on high tech and other multinationals. It is hard to see how this is compatible with the UK’s double tax treaty obligations unless there is a specific treaty override.”
Anna McCaffrey, employment senior associate at Taylor Wessing, says: “The government set out its plans to promote apprenticeships, including making it more attractive for employers to take on younger apprenticeships by abolishing the requirement to pay employer National Insurance Contributions for all but the highest earning apprentices under 25. This should go some way to achieving the government's aim of improving employment prospects for young workers by increasing the number of apprenticeships."
