Stamp Taxes Flashcards
(50 cards)
what is stamp duty?
stamp duty is charged on the transfer of existing shares/securities
how is stamp duty taxed?
using a stock transfer form;
stamp duty reserve tax applies to paperless transactions
what is stamp duty charged at?
0.5%, rounded up to the nearest £5
when is there no charge to stamp duty?
if consideration is £1,000 or less
when must the stock transfer form be presented to HMRC?
before the end of the 30-day period after the date of the transaction
duty must be paid at the same time
when must stamp duty be paid?
at the same time as the transfer of the stock transfer form being presented to HMRC
which is before the end of the 30-day period after the date of the transaction
what happens when transfer form for stamp duty is presented late?
penalties apply
mitigated penalties?
penalties are lessened depending on length of delay in stock transfer form/stamp duty payment
mitigated penalties percentages?
0-12 months delay = 10% of duty (capped at £300)
12-24 months delay = 20% of duty
24+ months delay = 30% of duty
rules for penalties?
- penalties are rounded down to nearest £5
- penalties are not charged if below £20
what happens if duty is paid late?
penalties apply
interest may be charged too
how does interest on delayed stamp duty payments work?
- interest may be charged if duty is paid late
- interest due is calculated using daily interest rate applicable for each day tax was outstanding
- interest is rounded down to nearest multiple of £5
- interest is not charged if amount is less than £25
when is there an exemption from stamp duty?
- on issuance of new shares/securities
- intra-group transfers of shares (e.g., within HSBC)
what is exempt from stamp duty?
- gifts
- divorce arrangements
- variations of wills
- securities on AIM
what is stamp duty reserve tax (SDRT)?
applies to the paperless transfer of shares/securities
SDRT rate?
0.5% (no rounding)
how is SDRT collected?
automatically by stockbrokers
when must SDRT be paid?
14 days after the trade date (if via crest)
if not, by the 7th day of the month following the agreement was made
are there penalties for failing to make a return/late payment for SDRT?
yes
interest is also charged on this
when is there an exemption for SDRT?
- if there is no consideration
- group transfers
- securities on AIM
what is stamp duty land tax (SDLT)?
payable by the purchaser in a land transaction
e.g., purchase of land, assignment/grant of a lease
when must land transaction form be submitted (for SDLT)?
land transaction form must be submitted by the purchaser
before the end of the period of 14 days after the date of the transaction
SDLT must be paid on the same day
SDLT is charged on the VAT inclusive or exclusive price?
VAT inclusive
rates for SDLT for residentials?
0-250,000 = 0%
250,001-925,000 = 5%
925,001-1,500,000 = 10%
1,500,001+ = 12%
