Stamp duty Flashcards
What is stamp duty?
duty on documents relating to stock (e.g shares or marketable securities)
BUT when shares are transferred electronically (no instrument)
No stamp duty and instead stamp duty reserve tax
what could not having a document stamped lead to?
cannot be used in civil proceedings
how is stamping done?
now done electronically
what must be provided?
FULL details of the facts and circumstances relating to an instrument to allow stamp duty to be correctly applied-failure to do so can lead to a 3k fine
what rate is stamp duty charged at and who pays?
0.5% and it is paid by the recipient (is an allowable expenses for CGT). It is then rounded up to the nearedt £5
When is stamp duty not payable
consideration does not exceed 1k (exemption certificate on the reverse of the stock transfer form must be completed before sending to the registrar of the company)
when does the 1.5% rate apply?
to shares that are transferred to a clearance service or depositary receipt issuer
when must a taxpayer send the stock transfer form to HMRC?
within 30 days of the ‘effective date’ of the transfer
when is stamp duty NOT payable?
when a company issues new shares to it’s shareholders or when new shares are subscribed for
if company purchases back it’s own shares?
0.5% rate will apply as usual
examples of when no stamp duty is payable?
-gifts,
-transfers to a trust
-transfers on marriage
-transfer on divorce
-transfer by liquidator
(long list on page 452 but i dont think they will be relevant)
is stamp duty avoided if dont pay in cash?
no still payable if pay via shares/loan notes etc
when is there an exemption from stamp duty?
shares pass between 2 companies in a group
when will interest begin to run from?
the end of 30 days from the date that the instrument is executed-will be rounded down to the nearest £5 and will not be levied if the amount of interest due is less than £25
