Compound Interest&

Stamp Duty In The UK

COMPOUND INTEREST

As stated by Albert Einstein, compound interest is "The greatest mathematical discovery of all time". There isn’t any scope of doubt about this genius mathematical mastermind’s comments. Unlike the calculus we studied in high school, compound interest has been applied to every step in our life and the ramifications are substantial.

SUBSTANTIAL FORTUNE

Is it enough to just invest to have a substantial fortune at the age of 50? For most people, planning is a big constraint they lack on. Good planning can turn even small investments into huge profits. We’ll try to demonstrate that to you with a comparison study.

COMPOUND INTEREST TURN AGAINST

When it comes to compound interest, the receiving end is the best side of the game. The other end of the compound interest is not so much fun.

THE ALTERNATIVE

Take the same calculation from above and think that this time you are not the investor of direct lander but you are the borrower, and you borrow £20,000 for 20 years on 5% annual compound interest rate. This will cost you £53,065.95 at the end of said 20 years. The loss here is some £33,000.

STAMP DUTY IN THE UK

Chancellor George Osborne said in his autumn statement to the parliament, just before the next coming general election, it is big bonus from a customer perspective and the regulations change regarding stamp duty will come into effect very soon.

PREVIOUS RATES

If you have exchanged contracts of property hand over on or before 3rd December and have finished formalities on 4thDecember or after that, you could choose to pay with whichever stamp duty you feel more comfortable with, the before change one or the after change one.

RESIDENTIAL PROPERTIES

0% if the property price is under £125,0002% for the next £125,0005% for the next £675,00010% for the next £575,00012% for the rest (above £1.5 million)

FOR CORPORATE BODIES

Stamp duty on residential properties which costs more than £500,000, and has been bought by a company or collective insurance schemes is charged 15%.

RESIDENTIAL LEASES

If your residentially leased property is worth more than £125,000 then you will have to pay 1% stamp duty on the on the amount which is beyond the £125,000 limit.

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