Stamp duty cut little help for Londoners
- Publish date: 24 November 2017
- Archived on: 24 November 2018
While the cut in stamp duty may have grabbed the headlines, other changes over property, carried interest and digital taxation will be watched closely by Londoners, says RSM tax partner Dan Robertson.
In recent years, tax commentators have become used to headline grabbing announcement from the despatch box on Budget Day. But last month’s Budget was an exception as the Chancellor’s presentation was comparatively light on major tax announcements. Nonetheless, there were some interesting developments that will affect Londoners in both the short and long term, as well as the UK economy as a whole.
As far as tax give-aways are concerned, granting SDLT relief to first-time home buyers on purchases up to £500,000 made the headlines though may be of limited benefit to the many young professionals hoping to get a foot on the ladder in London. Although less eye-catching, the freezes to fuel duties and business rates will provide welcome relief to London’s road users and small businesses.
On the revenue raising side the Chancellor is increasingly targeting property as a potential source of revenue. Of course, the London property market is a key barometer of the nation’s economic health, and with property valuations generally perceived to be on the high side, its perhaps unsurprising that the Chancellor has chosen to extract more tax revenue from UK real estate.
It is also notable that two of the three key property tax raising measures are targeted at non-residents (ie, non-voters) through changes to the non-resident landlord regime, and the extension of UK tax to chargeable gains realised on UK commercial properties by non-residents.
Elsewhere, there is a renewed commitment to tackling tax avoidance through additional HMRC resources, and further attacks on the private equity industry’s ‘carried interest’ arrangements that no doubt will be carefully scrutinised by many in the City of London.
Perhaps most interesting of all, and particularly for London’s tech business population, is the possibility of a new regime for taxing non-residents in respect of digital UK sales.
The ideas presented are currently sketchy but the position paper released by the UK government adds further weight to the views already expressed by the EU and the OECD in this area. This is certainly an important and developing area of the international tax landscape and should be closely watched.
Dan Robertson is a London tax partner at RSM UK.
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