Brussels, 27/01/2003 (Agence Europe) - The European Commission decided that the UK stamp duty exemption is in line with Community objectives on economic and social cohesion as well as sustainable development and trading conditions will not be adversely affected to an extent contrary to the common interest. This authorisation is, however, subject to a number of conditions.
The UK exemption from stamp duty applies to non-residential properties in disadvantaged areas in the United Kingdom. The measure intends to contribute to the physical regeneration of designated disadvantaged areas in the UK by means of reducing the cost of acquiring non-residential property in these areas. Stamp duty obligations are taxes levied on documents relating to sales and leases of land and buildings and transfers of share. The transaction tax does not exceed 4% of the price of a purchase or lease. The Commission has assessed the UK stamp duty exemption scheme taking into account two key factors: the compatibility with Community objectives and the effect on trading conditions. It considers that regeneration of rural and urban areas is part of the concept of social and economic cohesion and that due to the low rates of investment in the deprived areas together with the relatively low aid intensity of the scheme, the aid does not adversely affect trading conditions to an extent contrary to the common interest. The Commission considered, however, that the Stamp Duty Exemption would only be compatible with state aid legislation, should it fulfil a certain number of conditions. These conditions relate, in particular, to the necessity to limit cumulation with other aid, to reporting obligations and to the need to submit detailed reports on the effects of the scheme in the physical regeneration of the eligible areas. The Commission approval is limited in time until 31 December 2006, since from that date new Regional Aid Guidelines will become applicable.