Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

TC > 14. TC - Stamp taxes > Flashcards

14. TC - Stamp taxes Flashcards

1
Q

What is stamp duty charged on?

A

Charged on the transfer of existing shares or securities using a stock transfer form
Stamp duty reserve tax applies to paperless transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

When does stamp duty reserve tax apply?

A

Applies to paperless transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the amount of stamp duty payable? and who is it payable by?

A

Stamp duty is payable by purchaser at 0.5% x consideration rounded up to nearest £5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Is stamp duty always charged, regardless of the price

A

No, there is no charge to stamp duty if the consideration is less than £1,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the deadline for stock transfer forms? and what must be done at the same time

A

Must be presented to HMRC within 30 days of execution and the duty must be paid at the same time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

When do penalties apply for presenting a transfer form late?

A

When the delay is not deliberate, mitigated penaltys usually apply
In the exam, assume that the delay is not deliberate unless told otherwise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What do mitigated penalties for late transfer forms depend on

A

Depends on the number of months of the delay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Summarise the penalties for late transfer forms

A

Up to 12 months = 10% of duty, capped at £300
12-14months = 20% of the duty
24+ months = 30% of the duty

Rounded down to nearest £5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How are penalties for late transfer forms rounded?

A

Rounded down to nearest £5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

When is a penalty for late transfer forms not charged?

A

When the penalty comes to less than £20

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does the penalty depend on for late transfer forms when the delay is over 12 months and deliberate

A

Depends on the type of failure (deliberate or deliberate and concealed)
the nature of the disclosure (prompted or unprompted)
and the timing of the disclosure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What can also be charged alongside a penalty for late transfer forms?

A

Interest can be charged if the amount is paid late
It runs from end of 30 day period to the day before the duty is paid
a rate of 3.25% applies but the interest is rounded down to nearest £5 and isn’t charged if the amount is less than £25

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the rate of interest on late paid transfer fees?

A

3.25%

But rounded down to nearest £5 and isn’t charged if the amount is less than £25

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

TYU1: Millie sells her shares in Rory Ltd to Ben for £74,830 on 11 August 2019
State the amount of stamp duty, the person liable to pay it and the due date for both paying the tax and presenting the stock transfer form to HMRC

A

Ben must pay stamp duty of £74,830 x 0.5% =£374.15 rounded up to £375

The duty must be paid and stock transfer form presented to HMRC by 10 September 2019

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Give some examples of items that are exempt from stamp duty

A
  • Gifts (in lifetime or in death)
  • Divorce arrangements
  • Variations of wills
  • Securities dealt on a RECOGNISED GROWTH MARKET (e.g. aim)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does SDRT stand for?

A

Stamp duty reserve tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What does SDRT apply to?

A

Applies to paperless transfer of shares or securities (usually via a CREST system)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the % of SDRT payable?

A

Payable at 0.5% x consideration with NO rounding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How is SDRT collected?

A

Collected automatically by stock brokers

20
Q

When must SDRT be paid?

A

Must be paid to HMRC 14 days after the trade date if via CREST, otherwise by the 7th day of the month following the month the agreement was made

21
Q

What penalties are charged for late filing or payment for SDRT?

A

Those falling under the common penalty regime

22
Q

What % of interest is paid on late SDRT?

A

3.25%

23
Q

When does interest run from and to on late payments of SDRT?

A

Runs from the due date to the actual date of payment

24
Q

When is there no SDRT payable?

A

When there is no consideration i.e. it is agift
Group transfers qualifying for stamp duty relief are also exempt from SDRT
Securities dealt on recognised growth markets e.g. AIM

25
Q

When is there no SDRT payable?

A

When there is no consideration i.e. it is agift
Group transfers qualifying for stamp duty relief are also exempt from SDRT
Securities dealt on recognised growth markets e.g. AIM

26
Q

Who pays SDLT?

A

The purchaser in a land transaction

27
Q

Give some examples of when SDLT is payable?

A

When purchasing land

When assignment/ grant of a lease

28
Q

When must a land transaction form be submitted by?

A

On/after 1 March 2019 a land transaction form must be submitted within 14 days
And SDLT paid by the same date
For transactions before 1 march 2019 the time limit was 30 days

29
Q

What is SDLT charged on?

A

Charged on the VAT inclusive price at the relevant rate for each slice of consideration

30
Q

What does SDLT stand for?

A

Stamp Duty Land Tax

31
Q

What are the bands and rates for residential SDLT?

A 
0% up to £125k 
2% £125,001 - £250,000
5% £250,001 - £925,000
10% £925,000 - £1.5m 
12% £1.5m +
32
Q

What are the bands and rates for non-residential SDLT?

A

0% up to £150k
2% £150k-£250k
5% £250k +

33
Q

How are residential rates sometimes increased?

A

Each residential rate is increased 3% for the purchase of additional residential properties (e.g. where they already own a residential home and are buying a property to let)

But higher rates are not charged for transactions under £40k
Can be refunded if the new property replaces the purchasers only home/main residence

34
Q

When is the additional rate for buying an additional residential property refunded?

A

Can be refunded if the new property replaces the purchasers only home/main residence

35
Q

When is the additional rate for buying an additional residential property not charged?

A

Higher rates are not charged for transactions under £40k

36
Q

What are the rates for individuals buying their first property as their first and only home ?

A

0% on consideration up to £300k
5% on £300k-£500k

Then back to usual
5% £500,000 - £925,000
10% £925,000 - £1.5m
12% £1.5m +

37
Q

TYU2: Peter purchased a house costing £275k on 9 Oct 2019
Calc the amount of stamp duty land tax payable and state the due date for payment assuming that:
a) Peter owns no other residential property

A 
a. 
£125,000 x 0% 0 
£250k - £125k x 2% = £2,500 
£275k - £250k x 5% = £1,250
SDLT payable by 23 Oct 19 £3,750
38
Q

TYU2: Peter purchased a house costing £275k on 9 Oct 2019
Calc the amount of stamp duty land tax payable and state the due date for payment assuming that:
b) Peter already owns another house and intends to let this one out

A

b.
£125k x 3% £3,750
£250k - £125k x 5% £6,250
£275k - £250k x 8% £2,000

SDLT payable by 23 Oct 19 £12k

39
Q

TYU2: Peter purchased a house costing £275k on 9 Oct 2019
Calc the amount of stamp duty land tax payable and state the due date for payment assuming that:
c)Peter is a first time buyer

A

No SDLT as the consideration is below £300k

40
Q

TYU3: Rob purchased the following assets in Nov 19
Retail shop £220k from George
Office building £145k from Patrick
a. Calculate the stamp duty land tax payable on each transaction and state who pays the duty
b. State the due date for both paying the tax and presenting the land transaction form to HMRC assuming the actual date of the transaction was 15 November

A 
Retail shop 
£150k x 0% 0 
70k x 2% £1,400 
£220k 
SDLT = £1,400 Rob

Office building
£145,000 x 0% = 0 Phil

A land transaction form must be submitted by Rob by 29 November 2019 and the SDLT paid by the same date

41
Q

What are the % rates for SDLT on total rents non-(residential)

A

0% up to £150k
1% £150k-£5m
2% £5m +

42
Q

TYU4: Kevin is granted a 24 year lease of a factory on 16 Nov 19 for a premium of £155k
Kevin will pay an annual rent of £10k per year for the term of the lease

Calc the amount of SDLT payable and state the due date

A

Premium
£150k x 0%
£155k - £150k x 2% £100

SDLT payable by 30 Nov 2019 £100

Total rent
The total rent over the life of the lease = 24 x £10k = £240k

£150k x 0% = 0
£240 - £150 x 1% £900
SDLT payable by 30 Nov 2019 = £900

43
Q

What are the penalties if land transaction forms are submitted late?

A

Up to 3 months late: £100
Over 3 months late: £200
Over a year late: tax geared penalty (capped at amount of SDLT due)

44
Q

What are penalties for errors of land transaction form?

A

Fall in with common penalty regime

45
Q

What is the interest rate charge on late SDLT paid and when does it run from/to?

A

3.25%

Interest runs from day after the due date to the day before the duty is paid

46
Q

What are exempt from SDLT?

A
  • Gifts
  • Transfers on divorce
  • Variation of a will
  • Intragrop transactions are exempt unless
    at the time fo transfer arrangements exist for the transferor and transferee companies to cease to be members of the same group
    no transfer is not for bonafide commercial reasons
47
Q

When are intragroup transfers exempt for SDLT?

A
  • Intragrop transactions are exempt unless
    at the time fo transfer arrangements exist for the transferor and transferee companies to cease to be members of the same group
    no transfer is not for bonafide commercial reasons

TC (25 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions