Our UK expert team continues its series on the 2014 Autumn Statement with this look at the changes to stamp duty land tax.
In his UK Autumn Statement on 3 December 2014, George Osborne, the Chancellor of the Exchequer, announced changes to the stamp duty land tax legislation, to come into effect at midnight on that date.
The result was twofold depending on your circumstances.
Two multi-million pound residential sales and legal teams worked tirelessly into the night, pushing sales of property worth £30m each through to completion with just minutes to spare, saving around £1.4m in stamp duty each. Further teams around the country similarly burned the midnight oil with some £200m worth of property deals completing before midnight to save increased stamp duty land tax liabilities.
But the average homeowner did not have to go to such lengths to save money. Whereas before, any property sold had its entire value subjected to the percentage of tax applicable to that value (higher values were taxed at higher percentages), the new reforms mean that the percentage rates are now applied on a cumulative basis.
The result is a saving of tax of around £4,500 on an average priced home in the UK, with savings on all residential purchases up to the value of £1,125,000.
Over and above this value, the stamp duty liability increases from that previously incurred.
The new stamp duty rates are detailed below.
| Value of property
| Up to £125,000
| £125,001 to £250,000
| £250,001 to 925,000
| £925,001 to £1.5m
| Over £1.5m
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