UK clamps down further on property purchases made through firms

LONDON (REUTERS) - Britain is clamping down on property investors who buy homes through a company by expanding the pool of properties eligible to be taxed, Finance Minister George Osborne said in his budget speech on Wednesday.

Mr Osborne said that Britain would increase taxation on residential properties purchased via a company by extending its scope from residential properties worth over 2 million pounds (S$4.2 million) to include those worth more than 500,000 pounds.

"We are expanding the new tax we introduced to stop people avoiding stamp duty by owning homes through a company," he said.

"From midnight tonight, anyone purchasing residential property worth over half a million pounds through a corporate envelope will be required to pay 15 per cent stamp duty."

In 2012, Britain introduced stamp duty of up to 15 per cent for purchases of more than 2 million pounds through a company.

Wealthy buyers, especially in London, have used companies as a way to reduce tax liabilities.