News

The budget versus offshore property vehicles

26th March 2014

When the Government had already announced a 15% stamp duty on all properties bought through a corporate envelope above £2m, it was a clear shot across the boughs of overseas investors attempting to avoid stamp duty by using such a vehicle.

In this month's budget, this threshold has been reduced to just £500,000, which means that pretty much every residential unit in central London falls under the legislation.

There seems to have been several reasons for this move. It closes a tax loophole and will bring in more revenue to the Exchequer. It has also been regarded as unfair that UK buyers pay stamp duty but by using such a vehicle, some investors and overseas owners could get away without doing so. Perhaps even more importantly there has been increasing concern that many properties in London are lying empty because they are being used as a land bank for investment rather than something to actually be inhabited.

It is notable that it has been announced that homes rented out are exempt from this measure in a bid to reduce the number of  empty dwellings in the Capital, bringing more stock on to the market.


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