Scottish property solicitor criticises Gordon Brown's tax U-turn
A leading Scottish property solicitor has criticised Chancellor of the Exchequer Gordon Brown’s decision to abolish without notice the exemption for deprived areas from Stamp Duty Land Tax (SDLT).
(I-Newswire) - A leading Scottish property solicitor has criticised Chancellor of the Exchequer Gordon Brown’s decision to abolish without notice the exemption for deprived areas from Stamp Duty Land Tax ( SDLT ), saying that the measure would have an adverse impact upon the commercial property market in Scotland.
The highest rate of SDLT, which is paid by the purchaser, is currently 4% and is payable on transactions of more than £500,000.
However, deals in parts of Scotland that are designated as being “disadvantaged” were until midnight on Wednesday exempt from the levy.
But in his latest Budget Mr Brown scrapped the exemption, and experts believe that this will discourage commercial property investment.
Norman Geddes, senior partner of solicitors Frazer Coogans Commercial said: “This has caused consternation in the commercial property market. Because no notice was given, there are many transactions where the purchaser has agreed to buy property on the understanding that no SDLT is payable because it lies in a Disadvantaged Area.
“If the missives ( contract ) had not been concluded by Budget Day then the purchaser now faces paying Stamp Duty at 4% when he expected none. On a £1 million deal this is £40,000, and on a £2 million deal it is £80,000 of tax, imposed without warning.
“The purchasers will either have to accept this unexpected penalty, or withdraw from the deal if they can, or try to renegotiate the price.
“The lack of notice has unfairly affected transactions which were already in progress. If some notice had been given, then transactions in process could have been completed and new transactions could be agreed in the knowledge that the tax would apply.
“It is now likely that some deals will fall through.”
Norman Geddes concluded: “The SDLT concession was introduced in 2003 to encourage redevelopment in Disadvantaged Areas. Urban regeneration will clearly be affected by this sudden change of policy.”
Ayrshire solicitors Frazer Coogans have expanded rapidly from small beginnings in the 1980s to offer a friendly and personal service to all clients from their modern premises in Ayr town centre.
From their Ayr base, partners Norman Geddes, Austin Thomson, Lauren Fowler and associate Angus Logan – all experienced solicitors - along with their professional and dedicated staff, provide a comprehensive suite of legal services to Ayr, Ayrshire, Scotland and the UK, with particular expertise in accident claims, personal injury damages, property conveyancing, divorce and family law, wills, estates and executries.
Issued on behalf of Frazer Coogans Solicitors by Fame Publicity Services. Contact Murdoch MacDonald on +44 ( 0 )1292 281498.
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