Almost no one has understood quite how appalling Stamp Duty changes were in the Budget.

The sound of people working out what to do is palpable. The sound of people exhaling thinking they’ve just dodged a bullet is too. But most of them are wrong and simply haven’t understood what happened yesterday in the Budget. In fact many people have totally missed the point and the unintended consequences.

The furore pre Budget was directed at those owning property offshore. What rankled was the way some placed their properties in the name of an offshore owned Special Purpose Vehicle, the property being the sole asset. When they come to sell these properties the choice is there to for a buyer to simply buy the shares in the company thus avoiding paying any Stamp Duty as the entry on the Land Registry doesn’t change. This Budget has NOT addressed this issue at all

The second issue was the use of Stamp Duty Mitigation Schemes involving the use of specially formed UK companies and sub sale relief.

Given that the Tories had to throw a bone to their LibDem coalition partners SDLT seemed like a soft option given that it makes them look as if they’re taxing the Rich. 7% is going it a bit but where they’ve veered severely off course is by charging 15% to anyone buying in anything other than an individual name, or as they put it, a non-natural person. This convoluted expression refers to a Charity, UK company, offshore company, Trust, corporation or whatever, and they’ll be paying 15% SDLT. This is a huge amount of money and out of all proportion to what is reasonable.

40% of transactions in central London at over £2m are done to non-natural people (I wince when I say that) who still pay their SDLT, are NOT buying to evade/avoid Tax, but buy that way because it suits them. They may want anonymity, their family trusts dictate it, they may have other domestic tax issues they want to mitigate…but the point is almost half of all big deals appear, for the moment, to be subject to 15% Stamp. So such buyers face paying 8% more than those buying as individuals putting them at an immediate disadvantage when competing to buy.

All because George Osborne decided to try and clobber a few home grown Stamp Duty mitigation schemes.

These are wealthy people who’d be spending ££££m here in London, a massive contributor to the UK economy, who are now not going to be doing that and are genuinely shocked that a supposedly Tory Government can be so crude and stupid. I’ve talked to many very wealthy people who will be dissing London, and if anyone out there thinks that’s a good thing they obviously weren’t around in 1974.

If you want to make your own mind up read this http://www.hmrc.gov.uk/budget2012/tiin-2120.pdf

but don’t ring the help line like I did, when asking what the possible “corporate structures” are that might be exempt they haven’t got a clue. Clear as mud. All in all yesterday was a fiasco on SDLT and people need to grasp the hideous and unforeseen consequences.

We are getting together some serious representations to make to the Treasury along with other agents and I hope if anyone else reading this feels they'd like to be a part of that we'd welcome talking. In the meantime in a market that requires volumes that have been sadly lacking for two/three years this is a very large step in the wrong direction.