Super-rich ‘will avoid Stamp Duty'

Charles Smith, who is managing director of Sotherby’s International Realty in London believes the richest buyers will simply carry out their property transactions via offshore trusts and corporation names.

Commercial transactions are exempt from the 5% Stamp Duty.

Commenting on the ‘Robin Hood’ changes to Stamp Duty, with the increased tax on the most costly properties supposedly paying for the increase of the initial threshold from £125,000 to £250,000, Smith said:

“If it is meant to be aimed at very rich people then he (the Chancellor) is surely mistaken because these people will use offshore vehicles. This does nothing to address Stamp Duty avoidance."

Most of Sotheby’s clients are cash buyers. Smith said that schemes for avoiding Stamp Duty are already being promoted by accountants and lawyers, and the increase in the tax will likely exacerbate the situation.

More than 80% of properties worth £1m and more are based in London and the South East. Estate agent Knight Frank has called the Stamp Duty increase a ‘tax on London’.

But Smith was sanguine regarding the impact of the new regime.

“It is an annoyance but it is not something that will stop them doing a deal,” he said.