Concern is mounting about the stamp duty changes made in the budget; the Financial Times has even said 'alarm'.On first reading, the changes seem innocuous enough.

They were a minor part of a package of anti-avoidance measures announced in the budget.

To 'counter avoidance of stamp duty' the rules governing exchanges of property have been changed.

Lease duty is now based on the market rent where rent is unascertainable at the commencement of a lease and an agreement to surrender a lease is now a stamp able document.Why should anyone object? The problems are that the new rules apply to many bona fide commercial and domestic transactions, there are startling anomalies, and the changes have been introduced without any debate.It had always seemed surprising that if two freehold properties were exchanged, duty was only payable on the equality money, and no ad valorem duty was paid at all if a leasehold property could be exchanged for a freehold property - but this was not avoidance.If a transaction can be carried out in alternative ways, the taxpayer is entitled to choose the one which results in least liability.

However, some had sought to exploit the rules on exchanges by exchanging a freehold for leasehold property with a nominal value and a large top-up payment which was in effect the purchase price.House builders have been quick to point out that it is often only possible to sell a new house if the house builder is willing to take the purchaser's old house in part exchange.

The new exchange rule threatens the recovery of the housing market.To almost everyone's disbelief, the duty now payable on a straightforward exchange is to be calculated on the value of the more expensive property.

The Inland Revenue gives the example of an exchange of a £100,000 freehold property for a £50,000 freehold property with £50,000 equality money.

Before the budget, duty was payable on £50,000 only.

Now, each leg of the transaction attracts duty on £100,000!In defence, the Inland Revenue says this result need not arise.

It says the new anti-avoidance legislation can be circumvented to achieve a single charge on one of the properties only.

If correct, the duty on a property acquired on an exchange could be based either on the value of the property 'sold', or the property 'bought', or could be 50p.

With such different results following from minor differences in a contract, it will not be long before the first professional negligence claim is filed.Developers fear that the new rules on exchanges could apply to lease variations which technically involve a surrender and re-grant of a new lease.

If this is the case, there is a risk that the duty could even exceed the new consideration.

They may also apply to sale and leaseback transactions.It may also have seemed anomalous that only a nominal duty was payable on a lease if the rent was unascertainable.

The new rules catch not only rent clauses drafted with stamp duty in mind, but many ordinary commercial leases.

Upwards of 5% of all new shop leases are said to be turnover leases.

If any part of the rent payable during the term of a lease is unquantifiable at the outset, market rent has to be substituted.

Valuation costs could be greater than the duty.It may be said that conveyancers will in future avoid rent review clauses where the rent is unquantifiable.

In many cases, however, the rent is unquantified for commercial, not stamp duty, considerations.Where stamp duty has been the motive, the lessor and lessee have often been in the same group of companies.

A stamp duty saving formula has been adopted in the absence of group relief.If these leases and genuine turnover leases are disregarded, it is difficult to believe that the loss of revenue was sufficient to justify a measure which is likely to have a high compliance cost for industry.A special parliamentary procedure, which allowed no opportunity for debate, was used to introduce these changes.

Unlike other budget resolutions, the stamp duty budget resolutions have permanent effect as if they were Acts of Parliament.

If past p recedent is followed, any changes made to the stamp duty clauses during the passage of the Finance Bill will not be backdated.The procedure used was designed to enable an increase in the threshold to take effect from budget day.

It may be reasonable to use this procedure for focused anti-avoidance measures, but the procedure is totally unsuitable for technical changes which affect a wide variety of commercial transactions which neither the Inland Revenue nor parliamentary counsel could be expected to have considered.

It is to be hoped that the debate on the stamp duty clauses is not cut short by the guillotine on the Finance Bill.