The Chancellor, George Osborne, has said that he will be “coming after” those people who try and avoid Stamp Duty and that he will announce “aggressive” new measures in this week’s budget.
Stamp Duty is paid on property purchases above £125,000 where the duty is charged at 1%, however above £1 million this rises to 5%. Stamp Duty is also paid when shares are bought, but at a much lower rate of 0.5%.
The past few years has seen a significant rise in Stamp Duty avoidance with some wealthy homeowners using an offshore company to buy property in the UK and avoiding significant amounts of Stamp Duty, costing the Treasury millions in lost revenue.
Mr Osborne said that buying property through an offshore company to avoid Stamp Duty was “unacceptable” and that he would “come down on that practice like a tonne of bricks”.
In the same interview the Chancellor said the budget would be one for “working people”, although he would not be drawn on whether the 50p tax rate would be abolished.
Mr Osborne said: “My priority is to help low and middle earners. That’s where the bulk of effort in the Budget is going to be.”
Speculation has continued to mount that the Chancellor will further reduce the tax advantages of pensions.
It is thought that the Treasury are considering a number of pension changes including abolishing or reducing higher rate tax relief, reducing the maximum amount which can be contributed to a pension each year or even making alterations to the amount of tax free lump sum which can be taken from a pension at retirement.
Although none of these measures have been confirmed pension experts are concerned that this Budget will see significant changes to the UK’s pension system.