The HM Revenue & Customs has told equity release providers that proposed changes to stamp duty for home reversion schemes will be scrapped. In the last budget, the Chancellor proposed that the basis for calculating stamp duty on home reversion schemes would be changed, with stamp duty being calculated based on the market value of the property with vacant possession. This was a change from the current rules, where the property is valued taking into account a discount for the lifetime lease granted to the customer.
Providers of equity release schemes were involved in the consultation on this issue, and were informed that the Inland Revenue had scrapped the changes.
Our view
This is just another "increase" in stealth tax.