Stamp Duty Land Tax: non-UK resident surcharge
Executive summary
The consultation document repeatedly states there is evidence that purchases of property by non-UK residents is pushing up house prices for UK residents. AAT agrees that, if set at the right level, an additional charge on such purchases will help control house price inflation.
AAT supports this policy in principle, having campaigned for its introduction for over 18 months following overwhelming support from its members. Although AAT agrees with much of what is being proposed, there appears to be some shortcomings, which must be addressed to ensure success.
The non-UK resident surcharge has been reduced from the 3% suggested by the Prime Minister in 2018 to just 1% today. This is likely to reduce the effectiveness of the charge in delivering its policy objectives of sufficiently reducing overseas residential property purchases to control house price inflation.
AAT does not believe the minimal residency test being proposed is sufficient. As proposed, overseas residential property investors only need to be resident in the UK for six months to avoid the charge. In contrast, UK residency is not granted by the Home Office until an individual has resided in the UK for at least five years.
Related consultation responses
Raising Standards in the Tax Advice Market: AAT's submission to HMRC
AAT argues for mandatory membership of professional bodies for all paid-for tax advisers to address the high levels of poor-quality tax advice in the UK.
Online sales tax: assessing an option to help rebalance taxation of the retail sector
AAT believes an online only sales tax, that will not replace business rates but provide funding for reduced rates for some retailers, would not be effective.
Review of the Office of Tax Simplification
We would like to see the OTS given additional resources and see it become involved in the development of new taxes rather than just existing tax reform.
