Clause 43 - Land transactions
Finance Bill
10:30 am
Mr Mark Prisk (Hertford and Stortford, Conservative)
I beg to move amendment No. 4, in
clause 43, page 30, line 7, leave out from 'provision' to end.
Welcome to the Chair, Mr. Gale, after our pleasant break, during which some of us felt like GCSE students. I suspect that the Chief Secretary and I shared that delight in making sure that we were intimate with every aspect of the Bill. I welcome the Chief Secretary to his place, and I am sad to hear that there may be a clash of business on Thursday Naturally, if the Economic Secretary wanted to get into the saddle then, we would be more than happy to play ball.
Before I refer to the amendment, I draw the Committee's attention to my entry in the Register of Members Interests. Hon. Members who have not recently referred to it may not know that I am a non-practising chartered surveyor, although it would probably be more accurate to say that I am an out-of-practice chartered surveyor. That means that I am a member of the Royal Institution of Chartered Surveyors, the leading property professional body, to which, among many other august bodies, I shall refer. It is important that the Committee is aware of that interest, which I put on the record for its benefit.
Clause 43 introduces one of the most fundamental changes that the new stamp duty land tax represents—the taxation of land transactions. The clause thereby replaces a 200 or 300-year-old stamp duty, which is not a tax on land transactions, but a charge on documents. I hope to consider the clause in its entirety later in a clause stand part debate, and I shall for now restrict my remarks to amendment No. 4.
The amendment would delete from subsection (2) the words ''by operation of law'' and is intended to probe the reasoning and intent behind the clause. At present the subsection reads:
''Except as otherwise provided, this Part applies however the acquisition is effected, whether by act of the parties, by order of a court or other authority, by or under any statutory provision or by operation of law.''
Subsection (2) is therefore remarkably wide in its scope. Unfortunately, that is typical of this whole part of the Bill, which deals with the stamp duty land tax, in that it involves over-reliance on sweeping powers and scope and overuse of vague language. The problem with that rather crude approach is threefold. First, the lack of clarity creates needless uncertainty for taxpayers. Secondly, the danger of unintended consequences is substantially increased. Thirdly—this is surely a concern from the Government's point of view—such an approach actually undermines measures to restrict tax avoidance.
Amendment No. 4 would remove the phrase ''by operation of law''. Many legal and other professional experts fear that the clause will adversely affect people whom the Government do not intend to hurt. Let us take as an example two people who are not married—perhaps a sister and brother—living together in, and jointly owning, a house. It appears that when one dies, the survivor would be liable to the new tax. That is not the case under the existing stamp duty, but it could be the case under the Bill.
Will the Chief Secretary make it clear who would and who would not be liable in such circumstances, and will he identify which transactions that are not chargeable under existing arrangements for stamp
duty will be liable to this tax? Will he also say how much additional revenue these specific transactions—not overall transactions—would generate in a full year, excluding, obviously, anti-avoidance measures?
This is a simple, probing amendment. Its purpose is to help us to examine the subsection with care. I hope that the Chief Secretary is able to provide the clarity that is lacking and which potential taxpayers will seek. If he can do that, I would be prepared to consider withdrawing the amendment, but, naturally, we shall want to hear what he has to say and the conclusions of the debate.