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STAMP TAXES

Shared Ownership

Relief from SDLT is available for certain land transactions where the purchaser is a ‘registered social landlord’ (RSL). RSLs are to be replaced, in England, by ‘registered providers of social housing’ (RPSHs), a new regime that will be open to profit-making companies.

The relief from SDLT will be extended to include profit-making RPSHs where the purchase is funded with the assistance of public subsidy.

Relief will also be available for purchasers under shared-ownership schemes operated by profit-making RPSHs, where the scheme is assisted by public subsidy. These measures will have effect for land transactions where the effective date is on or after Royal Assent to the Finance Act.

Measures will also be introduced to simplify the SDLT rules relating to the ‘Rent to HomeBuy’ shared ownership scheme, with effect where the effective date of the grant of the shared ownership lease under the scheme is on or after 22 April 2009.

Temporary Increase in Thresholds

The SDLT ‘holiday’, announced in September 2008, exempted from SDLT acquisitions of residential property where the chargeable consideration was not more than £175,000. The exemption applied to land transactions where the effective date was between 3 September 2008 and 2 September 2009.

The Finance Bill will raise the starting threshold for SDLT on residential property from £125,000 to £175,000 for land transactions where the effective date is between 22 April 2009 and 31 December 2009. From 1 January 2010 the threshold will revert to £125,000.

Leasehold Enfranchisement

Relief from SDLT, where the freehold of a block of flats is acquired by a ‘right to enfranchise’ company (RTE) on behalf of the leaseholders, has not been brought into force.

Reference to an RTE company will be removed to allow the relief to be claimed by any nominee or appointee who acquires the freehold of a block of flats on behalf of leaseholders under a statutory right of leasehold enfranchisement, thus enabling the relief to operate as originally envisaged.

The change will have effect for land transactions where the effective date is on or after 22 April 2009.

Stock Lending and Repo Arrangements

New reliefs are to be introduced to disapply certain stamp duty reserve tax (SDRT) charges which would otherwise arise where a stock lending or repo arrangement terminates without the stock having returned to the originator and the termination is a result of the insolvency of one of the parties. In such circumstances, the normal chargeable gains rule treating the non-return of borrowed securities as a disposal will also be disapplied. No stamp duty or SDRT charge will apply where securities are purchased to replace those lost as a result of the insolvency.

These provisions will apply where the insolvency occurs on or after 1 September 2008.