Module 3 - Stamp Duties

Question 1

Who pays stamp duty land tax?

Answer 1

The purchaser!

Question 2

Payment of stamp duty is under what principles?

Answer 2

Self-assessment but it’s generally dealt with by a solicitor

Question 3

When is payment of stamp duty land tax due?

Answer 3

14 days from the effective date of the transaction

Generally the date of completion, date of payment or possession - although from the buyer perspective it’s on the day of completion as the solicitor deals with it

Question 4

What does LBTT stand for and where does it apply?

Answer 4

Land & Buildings Transactions Tax
Scotland

Question 5

What does LTT stand for and where does it apply?

Answer 5

Land Transactions Tax
Wales

Question 6

Does first time buyer exemption apply in wales?

Answer 6

No

Question 7

What does stamp duty and stamp duty reserve tax relate to?

Answer 7

Stocks & Shares

Question 8

Stamp Duty is a duty on…

Answer 8

Documents that transfer the ownership of stock & shares

Question 9

What does stamp duty reserve tax apply to?

Answer 9

When stock & shares are bought via a paperless transaction - for example through a stock broker via an electronic system.

SDRT is charged on the agreement to transfer shares rather than on the document that achieves the transfer

Question 10

How much is charged stamp duty & stamp duty reserve tax?

Answer 10

0.5% of the consideration paid for the shares regardless of actual market value

Question 11

Is stamp duty & SDRT based on market value?

Answer 11

No, it’s 0.5% the consideration paid for the shares.

Question 12

Is it stamp duty is rounded

Answer 12

UP to the nearest £5

Question 13

SDRT is rounded…

Answer 13

To the nearest penny

Question 14

The threshold for stamp duty is…

Answer 14

No tax due ON TRANSACTIONS under £1000

Question 15

The threshold for SDRT is…

Answer 15

There is none

Question 16

With stamp duty and SDRT who is responsible for paint the duty?

Answer 16

The purchaser but the broker pays it to HMRC (usually)

Question 17

Can SDRT be deducted as a cost of purchase for future CGT?

Answer 17

Yes

Question 18

Can stamp duty be deducted as a cost of purchase for future CGT?

Answer 18

Yes

Question 19

How to calculate stamp duty & SDRT?

Answer 19

Cost of shares x 0.5%

I.e if shares were bought for £11K

£11,000 x 0.5% = £55

Question 20

What is CREST?

Answer 20

An electronic system for purchasing shares

Question 21

What must you not forget when calculating stamp duty?

Answer 21

To round up to £5
Tax not charged ON TRANSACTIONS under £1000