Tuesday, March 20, 2012

UK set to close property tax avoidance loophole

Foreign property buyers who have been using offshore companies to sell homes in London are expected to be targeted in the United Kingdom’s annual Budget statement tomorrow.

The UK’s Chancellor of the Exchequer (Finance Minister) George Osborne (pictured), speaking in an interview with the BBC, said he intended to “come down like a tonne of bricks” on those who sell their properties through offshore companies to avoid paying stamp duty.

The practise is understood to be a well-known and often-used loophole by foreigners and the rich when buying property in London.

He said: "People want to make sure that all sections of society are paying their fair share. On this specific issue of stamp duty avoidance, rich people - often foreigners who come to this country but also people here in Britain - who put homes into companies to avoid stamp duty, that is completely unacceptable and we are going to come down on that practice like a tonne of bricks. We are going to be extremely aggressive in dealing with it and people are going to face a very punitive charge. People have had their warning; they have got to pay stamp duty on the homes they live in."

Stamp duty in the UK starts at one percent for homes costing more than £125,000 (S$249,475), rising to five percent for those costing more than £1 million (S$1.99 million). Some 45,000 properties in England and Wales are thought to be worth more than £2 million (S$3.99 million), with some 80 percent located in London.

View the original article here

Source From Property Guru

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