Stamp Taxes

Question 1

Charge to stamp duty

Answer 1

• Payable on the transfer of shares and securities
• 0.5% of the consideration
• Payable by the person acquiring the shares
• rounded up to the nearest £5

Question 2

Exemptions from stamp duty

Answer 2

• Gifts
• Divorce arrangements
• Variations of wills
• Transfers in a 75% group

Question 3

Stamp duty reserve tax

Answer 3

• payable on the paperless (electronic) transfer of shares and securities
• 0.5% of the consideration
• no rounding

Question 4

Stamp duty land tax

Answer 4

• SDLT is chargeable on land transactions
• Based on the VAT inclusive amount
• The rate depends on whether residential or not
• Find the rates in the book (right before VAT)
• Extra 3% for an additional property

Question 5

Stamp duty land tax - first property

Answer 5

There’s an exempt amount of £300,000 and then after that there is a reduced rate on any remainder (5%) up to £500,000

Question 6

Lease rentals

Answer 6

• SDLT is payable on the premium
• SDLT is also payable on the rental
• The rental charge is based on the NPV of the rent payable to the landlord over the term of the lease. This is the total rent payable discounted by 3.5% per year.
• Don’t worry, there’s a table. It’s in the book.
• For the exam just take the NPV to be total rents payable over the term of the lease.

Question 7

Exemptions from SDLT

Answer 7

• Gifts
• Divorce
• Variation of a will
• Transfers in a 75 group

Question 8

Administration of SDLT

Answer 8

A land transaction form must be submitted to HMRC by the purchaser within 30 days of the transaction and the SDLT paid within the same time limit.