Budget 2002: Implications for Real Estate

The good news: Stamp duty rate unchanged

The top rate of stamp duty which it was feared might be raised from 4% to 5% remains unchanged. Stamp duty on transfers of commercial property in deprived areas will be abolished altogether once state aid approval is obtained - Government will legislate in the Finance Bill.

The bad news: Loopholes closed

However, as predicted, the loopholes used by property investors to avoid stamp duty are to be closed. Legislation is to be introduced to discourage a range of techniques which have allowed investors in large commercial properties to escape paying stamp duty: -

group relief where UK property has been transferred from one company to another in the same group and within two years the company in receipt of the property leaves the group will be subject to ìclawbackî.

clawback will also be introduced for the partial relief available under section 76 Finance Act 1986, where a company acquires...