Chancellor to Act to Prevent Tax Abuse?

With less than a week to go until the Budget, the newspapers are rife with speculation about the changes to the tax system that Chancellor Alistair Darling will introduce. One of the less well reported, but more probable, changes will be to close the loophole in the tax law that enables commercial property investors to avoid stamp duty by use of Sharia finance in their transactions.
 
The 2005 Finance Act introduced measures which were intended to correct an anomaly that could have led to some householders paying stamp duty twice on their properties if they used Sharia-complaint finance. Regrettably, a loophole was found in the wording of the Act which enabled stamp duty to be avoided altogether by the appropriate structuring of a deal. The lacuna has been seized upon by property developers with no link to Islam and used to avoid millions of pounds of stamp duty.
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