London’s learning

3 Dec 2014 By George Hay Follow @gfhay

The UK has a new 12 pct tax on property deals over $2.4 mln. That, and hikes in the cost of being “non-domicile,” will make the global mega-rich think twice about alighting in London. Property taxes elsewhere will fall. Policy is for once being set for the nation not the centre.

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The UK government is to change the way stamp duty is levied on property transactions so that rates apply to the portion of the purchase price within each band, Chancellor George Osborne announced on Dec. 3.

The government will also amend the rates and thresholds so that the portion of the transaction value up to 125,000 pounds is charged at a rate of zero, the portion between 125,001 and 250,000 pounds is charged at 2 percent, the portion between 250,001 and 925,000 pounds is charged at 5 percent, the portion between 925,001 and 1.5 million pounds is charged at 10 percent and the portion over 1.5 million pounds is charged at 12 percent.

Separately, the government is raising the remittance charge for so-called non-domiciles who have been resident in the UK for 12 of the past 14 years from 50,000 to 60,000 pounds, and introduce a new charging point of 90,000 pounds for those who have been resident for 17 of the past 20 years. The charge for those resident for seven of the past nine years will remain unchanged at 30,000 pounds.

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