The new Stamp Duty Land Tax, which affects all property deals, including commercial premises, comes into force this month.

The Government has replaced Stamp Duty with a new, directly-enforceable tax with heavy penalties for those trying to avoid payment.

All commercial property costing less than £150,000 is now exempt from the tax.

The new tax requires the completion of a lengthy return form that must be sent to the Inland Revenue within 30 days of a trans-action completing.

If the return is filed up to three months late, there is a penalty of £100, with a penalty of £200 thereafter.

If it is not paid within a year, there is a further penalty relative to the amount of tax that should have been paid.

The return requires the disclosure of the total amount paid for the property and any related transactions.

This includes money paid for contents, fixtures and fittings and the price of these should be based on their market value.

Nick Ellis, of Brighton property specialists Ellis & Co, said: "The new rules mean the person completing the return must take advice on how much of the overall price can be put down as such things as carpets and other fixtures and fittings.

"The Government has said its aim is to target transactions which attempt to reduce the amount of tax payable by attributing inflated values to the fixtures and fittings.

"Buyers, who will almost certainly be responsible for completing the return, must be on their guard."

Stamp Duty Land Tax affects all freehold and leasehold transactions that are completed on or after December 1.

Tuesday December 09, 2003