Budget 2012: Lib Dems win stamp duty rise for scrapping of 50p rate of tax The chancellor, George Osborne, is expected to axe the 50p top rate of tax in his budget, but raise stamp duty to 7% on properties worth more than £2m. Wealthy individuals are to face a rise in stamp duty on properties worth more than £2m, as George Osborne helps fund a demand from Nick Clegg to remove taxation altogether from 2 million of Britain's lowest paid workers. In a victory for the Liberal Democrats, who have reluctantly accepted abolition of the 50p top rate of tax, the chancellor will announce in the budget on Wednesday that stamp duty is to be raised from 5% to 7% on properties worth more than £2m. The rise in stamp duty on Britain's most expensive properties will help the chancellor raise an extra £1.5bn to meet the Lib Dem target of raising the income tax threshold to £10,000 from 2014, a year earlier than planned. Clegg, who persuaded Osborne last year to meet this target by 2015, irritated some Tories in February by calling on the chancellor to go "further and faster." The coalition parties were wrangling Tuesday night over final touches to the budget speech as Lib Dems pressed for tough language to highlight a renewed attack on tax avoidance schemes, with a "tycoon tax." Osborne is understood to be wary of the phrase. But buoyant Lib Dems claimed they had negotiated a "Robin Hood budget" in which the biggest item of expenditure would help meet their aim of a £10,000 tax allowance. One Lib Dem source said: "We are proud to call this the Robin Hood budget. We are interested in tax cuts to millions not to millionaires. The rise in stamp duty will mean that purchase of a property worth more than £2m will incur a rise in charges, from the current £100,000 to £140,000. Stamp duty on a property worth £5m will rise from £250,000 to £350,000. The chancellor will also announce a crackdown on millionaires who pay the lower business rate of stamp duty of 0.5% by "enveloping" their property in an overseas company. Any residential property, inhabited by the owner or by tenants, will now face full stamp duty. In the most significant gain for the Lib Dems, Osborne will say that the personal tax allowance will rise to around £9,000 from April 2013, just under £300 more than planned. It costs the chancellor £0.5bn for every £100 increase in the allowance above inflation. The chancellor will not set a figure for the allowance from April 2014. But it is understand the developments will make clear that he is prepared for a further £1,000 rise to take the allowance to £10,000 in the year before the general election of May 2015. In a sign that he and David Cameron believe Clegg needs some political support, as he accepts the abolition of the 50p rate, the Treasury was happy to give credit to the deputy prime minister. "Nick Clegg called for the budget to go further and faster in delivering lower tax to ordinary working people," a Treasury source said. George Osborne and David Cameron are more than happy to agree to that. This shows the coalition working together. The Lib Dems will say that the rise in stamp duty and the increase in the personal allowance will show that the rich will end up paying more despite the abolition of the 50p top rate of tax. A Lib Dem source said: "Nick Clegg openly called for this budget to go further and faster on delivering low taxes for millions of ordinary working people. The budget will deliver that. [Raising the personal allowance] will be the biggest item if expenditure of the budget. At the same time you will see Liberal Democrat influence in substantially increasing taxes on the wealthy. The move on the personal allowance will mean that the Lib Dems will go into the next election saying they have delivered the first pledge of their 2010 general election manifesto, which said: "The first £10,000 you earn tax-free: a tax cut of £700 for most people." The party will go further in its manifesto for the 2015 election and pledge a raised allowance, to at least £12,500. This will mean that anyone earning the minimum wage will be exempt from paying tax. It is understood that Osborne will also attempt to lower taxes on business. The chancellor may announce an extra penny off corporation tax this April. One Labour source said: "There are scarce resources and the chancellor says he can't do anything on tax credits and he can't do anything on fuel. And yet, however much the 50p top rate of tax does or does not raise, he has still decided to use several million pounds to give a tax cut to people earning over £150,000.