Councils that have just transferred their housing stock could receive a tax windfall of several million pounds after a Treasury U-turn.
Large scale voluntary transfers that have taken place since the Budget will benefit from a new stamp duty relief, the Treasury announced this week.

The new transfer organisations are likely to be lobbying their councils to ensure that the cash is used to boost their work with local communities.

The move to start the new relief from 22 March this year - the day after it was announced in the Budget - affects large scale voluntary transfers to non charitable bodies that have taken place since that date.

In the Budget chancellor Gordon Brown announced that stamp duty - currently levied at a rate of 4 per cent - would be abolished on LSVTs in the Finance Bill (Housing Today, 23 March) from the date when the bill received royal assent. It is expected to receive royal assent before the summer parliamentary recess.

But this week the Treasury said the move would start from the date of the announcement itself. Treasury secretary Andrew Smith said: "Bringing forward the extension of the stamp duty relief to the earliest possible date following the Budget announcement will help local authorities making transfers between 22 March and royal assent to the Finance Bill."

Local authorities which have made transfers on which stamp duty has been paid in this period will be able to make claims for repayments as soon as the finance act 2000 becomes law, he said.

The councils involved in transfers to Elmbridge Housing Trust, Huntingdonshire Housing Partnership, Wyre Forest Community Housing, Richmond Housing Partnership and New Charter Housing Trust in Tameside are all set to benefit.

Tameside borough treasurer Dave Postlethwaite said the council would benefit in net terms by £3.6m as a result. "We had been lobbying for this before the budget and as we concluded the transfer the treasury announced our lobbying had been succesful - but we would not benefit. This is very good news." However the money is to be used to support a PFI bid for local schools, and will not directly benefit local RSLs.

Source

Housing Today