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UK Budget to close 'loophole' in sharia mortgage |
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Written by Islamic Times
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Wednesday, 05 March 2008 |
UK Chancellor Alistair Darling is expected to close a loophole in Sharia finance rules that have allowed commercial property investors to avoid paying stamp duty on more than 1 bln stg of deals, The Times reported without citing sources.
Darling is expected to tighten the rules on mortgages that comply with Sharia - or Islamic law - in next week's Budget, the newspaper said.
The Government changed the stamp duty regime in 2005, amid concern that homeowners opting for Sharia-compliant mortgages were paying stamp duty twice, but it inadvertently created a tax avoidance opportunity that property developers have exploited, The Times said.
More than 1 bln stg of commercial property deals over the last two years have escaped stamp duty at 4 pct due to the loophole, it said.
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