§ Ruth Kelly
The effect of the introduction of Stamp Duty Land Tax on 1 December 2003 (including the effect of the changes announced recently) is:
Percentage Paying less duty 174 Paying the same duty 215 Paying more duty 11 1 Of which 72 per cent. reduced to nil. 2 All of which currently pay nil.
As a result of the increases in the thresholds for commercial and residential leases, from 1 December 2003, 87 per cent. of leases will pay no Stamp Duty Land Tax (compared with 15 per cent. who were exempt under stamp duty) and a further 2 per cent. will pay less Stamp Duty Land Tax than they would have paid stamp duty.
As a result of the changes, only 11 per cent. of leases will pay more Stamp Duty Land Tax than they would have paid stamp duty.
§ Ruth Kelly
Detailed consultation with a wide variety of representative bodies, including those for the retail and licensed trade, were held both before and after publication of the Finance Bill 2003. Both during and after these meetings, much useful information was shared.
Overall for commercial leases, the increase in the threshold from £60,000 to £150,000 will exempt 53 per cent. of the leases which would have paid stamp duty (in addition to the 9 per cent. of leases which currently pay no stamp duty) and the introduction of the 'slice' system will reduce the duty payable on another 5 per cent. of leases from that due under stamp duty.468W
It is accepted that different sectors will be affected differently, according to the sectoral distribution of lease lengths and rentals. The percentage of leases in particular sectors which are newly exempt or will pay less under SDLT are highly sensitive to these factors.
From data supplied by a representative body covering part of the licensed trade, analysis shows that, before 1 December 2003, 1.16 per cent.of leases taken out by its members were exempt whilst, if these leases were to be taken out on or after 1 December 2003, 37.43 per cent. would be exempt (for those leases within the data supplied.)