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Chancellor Alistair Darling is expected to announce he will close a loophole in Sharia law, which has benefited commercial property buyers, the Times has reported.
Currently, some property investors avoid paying stamp duty under Sharia finance rules. It has been estimated that more than £1 billion of commercial property deals have avoided the four per cent tax.
"This loophole has existed since 2005 but has been used more widely following the closure of previous stamp duty tax planning schemes," Peter Beckett, tax director for Ernst & Young told the paper.
The government established new guidelines for mortgages that complied with Islamic law because of concerns buyers using Sharia mortgages were paying stamp duty twice.
According to the Institute of Islamic Banking and Insurance, without this earlier legislation "the uncertain cost of the second stamp duty would make the Islamic home financing unattractive and cost prohibitive".