Stamp Duty Frequently Asked Questions
Stamp duty applies to transfers of stock and marketable securities, and to certain transfers of interest in partnerships. Stamp Duty also applies to a conveyance, transfer or lease of land where the instrument was executed prior to 1 December 2003.
If you are in any doubt as to whether stamp duty applies to a particular transaction please, contact the Stamp Office Helpline.
Land transactions which become effective on or after December 2003 are subject to Stamp Duty Land Tax (SDLT). The SDLT manual is available for further information.
About Shares
- What do I need to do if the consideration is less than £1000 or nil?
- Why might my application be returned to me?
- What needs to be included with my application?
- I want to give someone my shares, what do I do?
- Where can I get a stock transfer form?
- When must the Duty be paid?
- What do I do with the stock transfer form once it has been stamped and returned to me?
About pre-SDLT documents
- How can I calculate the duty on my transfer/conveyance/lease?
- Why do I need to get my lease stamped?
- I heard that tenancy agreements below a certain amount do not need to be stamped is this correct?
About adjudication and relief
About shares
Q. What do I need to do if the consideration is less than £1,000 or nil?
A. From 13 March 2008, most documents transferring stock or marketable securities that were previously chargeable with £5 stamp duty will be exempt and will not need to be presented to HM Revenue & Customs (HMRC) for stamping. These can be sent direct to the company registrar. Further information can be found in the budget announcement.
Q. Why might my application be returned to me?
A. Your application could be returned for a number of reasons. The most common reasons for rejecting applications are:
- stock transfer forms not being dated
- stamp duty not being calculated and rounded up to the nearest £5.00 on each stock transfer form/document
- consideration values not being shown on each form, if shares are being exchanged as consideration we need a value for these shares to be able to calculate the duty
Q. What needs to be included with my application?
A. You should include a covering letter providing a return address for your stamped document, along with the document that requires stamping (Stock Transfer Form/Form169), and payment for the necessary duty, and an agreement/supporting documentation for adjudication cases.
Q. I want to give someone my shares, what do I do?
A. You need to get a stock transfer form and fill in your name as 'transferor' and their name as 'transferee'. You should put 'gift' or 'nil' in the consideration value box. This form does not need to be presented to HMRC, and can be given directly to whoever is dealing with the registration for the company.
Q. Where can I get a stock transfer form?
These are not HMRC forms and are produced by a number of different firms. These are available from legal stationers or your bank or building society . There may be a small charge.
Q. When must the Duty be paid?
A. The Stock Transfer must be sent to Birmingham Stamp Office within 30 days of the date on which it becomes effective. This is normally the date on the document. A penalty is payable if the document is sent after this 30 day period. Interest will also be charged on any duty which is not paid within the 30 day time-limit. Rates of penalties and interest and further information can be found on our website.
Q. What do I do with the stock transfer form once it has been stamped and returned to me?
A. After you have had your stock transfer form(s) returned and stamped by HMRC you should send it, together with the share certificate to the Registrar of the company in which the shares are held, you will find their address on the share certificate.
About pre SDLT documents
Q. How can I calculate the duty on my transfer/conveyance/lease?
A. The rates of stamp duty for older documents can be found under Appendix C(1) of our Stamp Taxes Manual. There will also probably be penalties and interest for late submission of your documents. For an accurate assessment we suggest you send in your original documents, we will then contact you to confirm how much is due.
Q. Why do I need to get my lease stamped?
A. Having a document stamped protects your rights to the property. You can not present a document in court if it has not been stamped. You may also need to register it with the Land Registry and they will only accept stamped documents
Q. I heard that tenancy agreements below a certain amount do not need to be stamped is this correct?
A. Yes. For agreements of seven years or less, if the annual rent (or average annual rent) is £5,000 or under you do not need to pay any duty. This also applies where the term is less than one year and the rent for that period is £5,000 or below.
About adjudication and relief
Q. What is adjudication and where do I obtain it?
In simple terms, adjudication is where the Stamp Office gives its formal opinion as to the amount of stamp duty due. It is an important step in taking forward an appeal against a stamp duty liability.
Stamp duty appeals are heard before the High Court in England, Wales and Northern Ireland and before the Court of Session in Scotland.
Adjudication is compulsory in certain situations not involving appeals. For example, you will need documents to be adjudicated when claiming relief:
- for transactions between related companies (Section 42 FA 1930)
- in connection with acquisitions of companies and undertakings (Section 75 and 77 FA 1986)
- for conveyances, transfers and leases to charities (Section129 FA 1982).
The adjudication service is available and a special stamp is impressed on the relevant document.
Q. Who can sign my Section 42 application?
A. This must be a named person who is in a position to make an unqualified statement from first-hand information. Examples are director or secretary of the company, in-house solicitor or a lawyer acting for the company. Further examples of who can sign can be found in Section 6.165 of our Stamp Taxes Manual.
