The House of Lords Finance Bill sub-committee, which scrutinises proposals unveiled in Budget 2012, heard how a package of measures intended to ensure the fair taxation of property were “cobbled together with no prior consultation” and gave very little thought to the impact “on bona fide businesses”.
The BPF told the committee that the government should abandon plans to extend capital gains tax and implement proposed exemptions from the 15% stamp duty rate for genuine property businesses as soon as possible.
Peter Cosmetatos, director of policy at the British Property Federation, said: “While some of the damage has been remedied and genuine businesses are generally unaffected by the stamp duty changes, it is very difficult to see how capital gains tax proposals can be redeemed.
“This most ill-conceived and complex element of the package will create incentives that run wholly counter to their declared policy aim.”
And he added: “It would have been bad enough needlessly to unsettle ordinary tax-paying businesses and to alarm actual and prospective inbound investors with poorly thought through announcements about future changes. What made matters far worse was the inexplicable decision to introduce the 15% rate with immediate effect and no consultation at all.”
