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The 2012 budget: key points for private client and property lawyers

The UK economy is expected to grow by around 0.8% in 2012.

Chancellor George Osborne’s budget unveiled today is set to target the wealthy, whilst cutting tax for business and clamping down on tax avoidance by corporates and individuals.

Changes affecting the private client and real estate sector include:

  • A 7% rate of stamp duty on property sales over £2m will be introduced.
  • A crackdown on Stamp Duty Land Tax Avoidance - Individuals buying properties over £2m through a company will face a 15% rate of stamp duty.
  • From April 2013, individuals earning over £150,000 will pay a top rate of income tax of 45p, reduced from 50p.
  • Introduction of a £50,000 charge for non-domiciled individuals who have lived in Britain for 12 years that can be offset for those investing capital in the UK.

Changes affecting business include:

  • A 2% reduction in corporate tax to 24%, dropping to 22% by 2014.
  • The introduction of a new General Anti-Abuse Rule to clamp down on any tax avoidance schemes used by large corporate as well as individuals.
  • 2% entry charge on real estate investment trusts (REITs) is to be abolished
  • 3 year grace period for REIT start-ups is to be introduced as part of the 2012 Finance Bill
  • Diverse ownership rule is to be relaxed

Article by Morayo Fagborun Bennett