Finance Bill Tracking Service 2007 | Budget 2007 | Budget Notes

BN22 Stamp Duty Land Tax: anti-avoidance measures

Who is likely to be affected?

1   Parties to schemes designed to avoid stamp duty land tax (SDLT).

General description of the measure

2   Finance Bill 2007 will include provisions replacing, with amendments, the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (2006 SI No 3237)

Operative date

3   This change will have effect for any transaction the "effective date" of which is on or after the date on which Finance Bill 2007 receives Royal Assent. The effective date is normally the date of completion, not the date of exchange, of contracts. However, the effective date may be earlier than the date of completion if the contract is "substantially performed", for example, if the purchaser takes possession or pays the purchase price in advance of completion. Most residential contracts will not be "substantially performed" in advance of completion.

Current law and proposed revisions

4   On 6 December 2006 HM Treasury made the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (2006 SI No 3237) to counter SDLT avoidance schemes. The Regulations were approved by the House of Commons on 15 January 2007. However the Regulations have effect only for 18 months from the date they were made.

5   The Government has therefore decided to replace the Regulations by permanent provision in Finance Bill 2007.

6   The Finance Bill provision will incorporate a number of changes to the Regulations. These take account in particular of representations made on the Regulations.

Further advice

7   If you have any questions about this change, please contact Michael Lyttle on 020 7147 2792, (email: michael.lyttle@hmrc.gsi.gov.uk) Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk