The Office of Tax Simplification has completed the first phase of its work on the review of stamp duty on paper share transactions and has published its interim report. The report describes the progress made following a first round of interviews and outlines two proposed options:
creating a digital, self-assessed, stamp duty to sit alongside SDRT; or
modifying SDRT to create a merged tax, which would charge ‘agreements to transfer’, rather than the transfer instruments.
The report asks a number of questions examining the feasibility of the proposed options, on which the OTS invites comments by 31 May 2017 (see http://bit.ly/2lZSRAv).
One of the questions about the self-assessed stamp duty asks whether HMRC should retain some measure of adjudication as part of the self-assessment process, in order to balance certainty with simplicity.
While none of the interviewees have suggested changing the fundamental requirement for payment of stamp duty to register a transfer of legal ownership, the majority have told the OTS they favour the merged tax approach. This raises questions around when the payment obligation would be triggered, which could be the ‘agreement to transfer’, or could use the concept of completion, or substantial performance, as with the SDLT rules. Other questions associated with this option concern whether to define the assets in scope using the SDRT definition of ‘chargeable securities’, or retain the stamp duty definition of ‘stock or marketable securities’.
The existing stamp duty and SDRT exemptions and reliefs would also need to be considered, along with the treatment of partnership interests, share buybacks and various other issues.
The OTS intends to issue its main report in the Summer.
The Office of Tax Simplification has completed the first phase of its work on the review of stamp duty on paper share transactions and has published its interim report. The report describes the progress made following a first round of interviews and outlines two proposed options:
creating a digital, self-assessed, stamp duty to sit alongside SDRT; or
modifying SDRT to create a merged tax, which would charge ‘agreements to transfer’, rather than the transfer instruments.
The report asks a number of questions examining the feasibility of the proposed options, on which the OTS invites comments by 31 May 2017 (see http://bit.ly/2lZSRAv).
One of the questions about the self-assessed stamp duty asks whether HMRC should retain some measure of adjudication as part of the self-assessment process, in order to balance certainty with simplicity.
While none of the interviewees have suggested changing the fundamental requirement for payment of stamp duty to register a transfer of legal ownership, the majority have told the OTS they favour the merged tax approach. This raises questions around when the payment obligation would be triggered, which could be the ‘agreement to transfer’, or could use the concept of completion, or substantial performance, as with the SDLT rules. Other questions associated with this option concern whether to define the assets in scope using the SDRT definition of ‘chargeable securities’, or retain the stamp duty definition of ‘stock or marketable securities’.
The existing stamp duty and SDRT exemptions and reliefs would also need to be considered, along with the treatment of partnership interests, share buybacks and various other issues.
The OTS intends to issue its main report in the Summer.
