Stamp duty crackdown: Osborne targets loophole for property placed offshore,,,

A crackdown on tax avoidance centred on hundreds of billions of pounds of property placed offshore is expected to be unveiled within months.

Chancellor George Osborne is expected to take action to close a loophole that has allowed wealthy homeowners to dodge stamp duty when they sell a property, by placing it in an overseas tax shelter.

But Liberal Democrat plans for a mansion tax – pushed again by Business Secretary Vince Cable yesterday – are not expected to be included in the Government’s March Budget.

Property loophole: A Crackdown on tax avoidance centred on hundreds of billions of pounds of property placed offshore is expected to be unveiled within months

More than £100billion of property in central London alone has been placed offshore beyond the reach of the taxman, costing the nation  billions in lost revenue.

The scheme enables the rich to avoid the 5 per cent stamp duty charged on properties worth more than £1million.

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Meanwhile, Business Secretary Vince Cable insisted his mansion tax plan was still very 'on the agenda' and would ensure rich foreigners who bought property in the UK contributed to the public finances while creating the 'right sort of incentives' for the housing market.

Mr Cable originally proposed the annual levy on properties worth more than £2million when the Lib Dems were in opposition and it was bitterly opposed by many Tories.

But he claims since the Coalition government took over, he has spoken to many Conservative MPs who back the proposal.

Mr Cable said: 'It is good for two reasons. It would constitute a tax on wealth rather than income, which we believe to be right, and also in economic terms it creates the right sort of incentives for the property market.'

He added it was 'perverse' that wealthy foreigners could buy high-value properties in the UK and contribute just £1,000 a year in council tax towards the public finances.

It is believed there are 40,000 to 50,000 properties in Britain worth than £2million, mostly in London and the South East.

The levy could raise as much as £1.7billion a year but it is likely it will be opposed by George Osborn, the Chancellor.