Removal of £5 Stamp Duty Charges
The Chancellor of the Exchequer announced in his Budget Report on 12 March 2008, changes in legislation which remove from the charge to stamp duty, those instruments transferring stocks and shares which attract the minimum stamp duty of £5. The changes will result in a significant reduction in the number of instruments which need to be presented to HM Revenue & Customs (“HMRC”) and therefore reduce both the administrative burden on HMRC’s customers and HMRC’s administration costs.
New £1,000 Threshold
Any instrument executed on or after 13 March 2008 which transfers stock or marketable securities for a consideration of £1,000 or less, is exempt from stamp duty.
HMRC strongly recommends that the new version of the stock transfer form is used. The front of the new stock transfer form remains the same but the reverse has been amended so as to include a new form of certificate which confirms that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. Provided the certificate is completed, the stock transfer form does not need to be presented to HM Revenue & Customs and should instead be sent to the company registrar.
Where the old version of the form is used and the instrument relates to a transfer on sale where the consideration is £1,000 or less, the following wording should be included on the form and it must be signed by the transferor or his/her/its solicitor or authorised agent:-
“I/we certify that the transaction effected by this instrument does not form part of a larger transaction or series of transactions in respect of which the amount or value, or aggregate amount or value, of the consideration exceeds £1,000.”
Instruments Chargeable with £5 Fixed Duty
Those instruments executed on or after 13 March 2008 that would previously have been chargeable with the minimum stamp duty of £5 (for example, transfers otherwise than on sale and transfers in connection with a divorce or the dissolution of a civil partnership) are now exempt from stamp duty.
Subject to a couple of exceptions, instruments relating to such transactions will no longer be chargeable with stamp duty nor do they require certification. Such instruments will not need to be presented to HMRC for stamping and should be sent direct to the company registrar.
Where an old version of the form is used to notify transactions that no longer require certification or stamping, only the front of the form need be completed.
For more information, please contact one of the members of the Corporate Team on 023 8033 4661 or email Katherine Allen.