Finance Act 1986

PART III U.K. STAMP DUTY

Securities U.K.

F1 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F1 S. 64 repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. V(2) Notes 1, 2 of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(2)

65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2 S. 65 repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. V(2) Notes 1, 2 of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(2)

66 Company's purchase of own shares U.K.

(1) This section applies where a company purchases its own shares under section [F3 690] of the Companies Act [F3 2006] F4 ....

(2) [F5 Any return which relates to any of the shares] purchased and is delivered to the registrar of companies under section [F6 707] of that Act F7 ... shall be charged with stamp duty, and treated for all purposes of the Stamp Act 1891 M1 , as if it were an instrument transferring the shares[F8 to which it relates] on sale to the company in pursuance of the contract (or contracts) of purchase concerned.

F9 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Subject to subsection (4) below, this section applies to any [F10 such return] which is delivered to the registrar of companies on or after the day of The Stock Exchange reforms.

(4) This section does not apply to any return to the extent that the shares to which it relates were purchased under a contract entered into before the day of The Stock Exchange reforms.

(5) In this section “the day of The Stock Exchange reforms” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Textual Amendments

F3 Word in s. 66(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 7(a)

F4 Words in s. 66(1) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 7(a)

F5 Words in s. 66(2) substituted (with effect in accordance with s. 195(12) of the amending Act) by Finance Act 2003 (c. 14), Sch. 40 para. 2(a)(i)

F6 Word in s. 66(2) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 7(b)

F7 Words in s. 66(2) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 7(b)

F8 Words in s. 66(2) inserted (with effect in accordance with s. 195(12) of the amending Act) by Finance Act 2003 (c. 14), Sch. 40 para. 2(a)(iii)

F9 S. 66(2A) omitted (with effect in accordance with s. 99(2) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 32 para. 5

F10 Words in s. 66(3) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 7(c)

Marginal Citations

M1 1891 c. 39.

Depositary receipts U.K.

67 Depositary receipts U.K.

(1) Subject to subsection (9) below, subsection (2) or (3) below (as the case may be) applies where an instrument [F11 (other than a bearer instrument)] transfers relevant securities of a company incorporated in the United Kingdom to a person who at the time of the transfer falls within subsection (6), (7) or (8) below.

[F12 (2) If stamp duty is chargeable on the instrument under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale), the rate at which that duty is chargeable is 1.5% of the amount or value of the consideration for the sale to which the instrument gives effect.

(3) [F13 In any other case—

(a) stamp duty is chargeable on the instrument under this subsection, and

(b)] subject to subsection (5), the rate at which that duty is chargeable is 1.5% of the value of the securities at the date the instrument is executed.]

(4) F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In a case where —

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(c) the transfer to the other person is effected by an instrument in the case of which subsection (3) above applies,

(d) before the execution of the instrument mentioned in paragraph (c) above an instrument is received by a person falling (at the time of the receipt) within subsection (6), (7) or (8) below,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the instrument mentioned in paragraph (c) above contains a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (3) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(6) A person falls within this subsection if his business is exclusively that of holding relevant securities —

(a) as nominee or agent for a person whose business is or includes issuing depositary receipts for relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of issuing such depositary receipts (in a case where the business does not consist exclusively of that).

(7) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument, and

(b) his business is or includes issuing depositary receipts for relevant securities.

(8) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument,

(b) he does not fall within subsection (6) above but his business includes holding relevant securities as nominee or agent for a person who falls within subsection (7)(b) above at the time of the transfer, and

(c) he holds relevant securities as nominee or agent for such a person, for the purposes of such part of that person's business as consists of issuing depositary receipts for relevant securities (in a case where that business does not consist exclusively of that).

(9) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom —

(a) to a company which at the time of the transfer falls within subsection (6) above F15 . . . , and

(b) from a company which at that time falls within that subsection F15 . . . ,

subsections (2) to (5) above shall not apply and [F16 stamp duty is not chargeable on the instrument].

[F17 (9A) In this section “bearer instrument” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.]

(10) This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Textual Amendments

F11 Words in s. 67(1) inserted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 14(2) (with Sch. 32 para. 23)

F12 S. 67(2)(3) substituted (with effect as mentioned in s. 112(6) of the amending Act) by Finance Act 1999 (c. 16) ss. 112(4), Sch. 14 para. 12(2) (with s. 122)

F13 Words in s. 67(3) substituted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 14(3) (with Sch. 32 para. 23)

F14 S. 67(4) repealed (with application as mentioned in s. 99(5) of the amending Act) by Finance Act 1997 (c. 16) ss. 99(1), 113, Sch. 18 Pt. VII Note 2

F15 Words in s. 67(9) repealed (with effect as mentioned in s. 134(5) of the amending Act) by Finance Act 2000 (c. 17), ss. 134(3), 156, Sch. 40 Pt. III Note 2

F16 Words in s. 67(9) substituted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 6

F17 S. 67(9A) inserted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 14(4) (with Sch. 32 para. 23)

68 Depositary receipts: notification U.K.

(1) A person whose business is or includes issuing depositary receipts for relevant securities of a company incorporated in the United Kingdom shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first issues such depositary receipts.

(2) A person whose business includes (but does not exclusively consist of) holding relevant securities (being securities of a company incorporated in the United Kingdom)—

(a) as nominee or agent for a person whose business is or includes issuing depositary receipts for relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of issuing such depositary receipts (in a case where the business does not consist exclusively of that),

shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first holds such relevant securities as such a nominee or agent and for such purposes.

(3) A company which is incorporated in the United Kingdom and becomes aware that any shares in the company are held by a person such as is mentioned in subsection (1) or (2) above shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which the company first becomes aware of that fact.

(4) A person who fails to comply with subsection (1) or (2) above shall be liable to a [F18 penalty] not exceeding £1,000.

(5) A company which fails to comply with subsection (3) above shall be liable to a [F18 penalty] not exceeding £100.

(6) F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F18 Word in s. 68(4)(5) substituted (with effect as mentioned in s. 114(2) of the amending Act) by Finance Act 1999 (c. 16), s. 114(1), Sch. 17 para. 8

F19 S. 68(6) repealed (with effect as mentioned in Sch. 20 Pt. V(3) Note of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(3)

69 Depositary receipts: supplementary U.K.

(1) For the purposes of sections 67 and 68 above a depositary receipt for relevant securities is an instrument acknowledging—

(a) that a person holds relevant securities or evidence of the right to receive them, and

(b) that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to relevant securities of the same kind, including the right to receive such securities (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,

except that for those purposes a depositary receipt for relevant securities does not include an instrument acknowledging rights in or in relation to securities if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.

(2) The Treasury may by regulations provide that for subsection (1) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt for the purposes of sections 67 and 68 above.

(3) References in this section and sections 67 and 68 above to relevant securities, or to relevant securities of a company, are to shares in or stock or marketable securities of any company (which, unless otherwise stated, need not be incorporated in the United Kingdom).

(4) For the purposes of section 67(3) above the value of securities at the date the instrument is executed shall be taken to be the price they might reasonably be expected to fetch on a sale at that time in the open market.

(5) F20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) The power to make regulations or an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Textual Amendments

F20 S. 69(5) repealed (with effect as mentioned in Sch. 20 Pt. V(1) Notes 1, 2 of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(1)

F21 S. 69(6)-(8) repealed (with application as mentioned in s. 99(5) of the amending Act) by Finance Act 1997 (c. 16), ss. 99(2)(b), 113, Sch. 18 Pt. VII Note 2

Clearance services U.K.

70 Clearance services U.K.

(1) Subject to subsection (9) [F22 and section 97A] below, subsection (2) or (3) below (as the case may be) applies where an instrument [F23 (other than a bearer instrument)] transfers relevant securities of a company incorporated in the United Kingdom to a person who at the time of the transfer falls within subsection (6), (7) or (8) below.

[F24 (2) If stamp duty is chargeable on the instrument under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale), the rate at which that duty is chargeable is 1.5% of the amount or value of the consideration for the sale to which the instrument gives effect.

(3) [F25 In any other case—

(a) stamp duty is chargeable on the instrument under this subsection, and

(b)] subject to subsection (5), the rate at which that duty is chargeable is 1.5% of the value of the securities at the date the instrument is executed.]

(4) F26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In a case where —

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(c) the transfer to the other person is effected by an instrument in the case of which subsection (3) above applies,

(d) before the execution of the instrument mentioned in paragraph (c) above an instrument is received by a person falling (at the time of the receipt) within subsection (6), (7) or (8) below,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the instrument mentioned in paragraph (c) above contains a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (3) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(6) A person falls within this subsection if his business is exclusively that of holding relevant securities —

(a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that).

(7) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument, and

(b) his business is or includes the provision of clearance services for the purchase and sale of relevant securities.

(8) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument,

(b) he does not fall within subsection (6) above but his business includes holding relevant securities as nominee or agent for a person who falls within subsection (7)(b) above at the time of the transfer, and

(c) he holds relevant securities as nominee or agent for such a person, for the purposes of such part of that person's business as consists of the provision of clearance services for the purchase and sale of relevant securities (in a case where that business does not consist exclusively of that).

(9) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom —

(a) to a company which at the time of the transfer falls within subsection (6) above F27 . . . , and

(b) from a company which at that time falls within that subsection F27 . . . ,

subsections (2) to (5) above shall not apply and [F28 stamp duty is not chargeable on the instrument].

[F29 (9A) In this section “bearer instrument” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.]

(10) This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Textual Amendments

F22 Words in s. 70(1) inserted (1.7.1996) by Finance Act 1996 (c. 8), s. 196(1)(6)

F23 Words in s. 70(1) inserted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 15(2) (with Sch. 32 para. 23)

F24 S. 70(2)(3) substituted (with effect as mentioned in s. 112(6) of the amending Act) by Finance Act 1999 (c. 16), ss. 112(4), Sch. 14 para. 13(2) (with s. 122)

F25 Words in s. 70(3) substituted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 15(3) (with Sch. 32 para. 23)

F26 S. 70(4) repealed (with application as mentioned in s. 99(5) of the amending Act) by Finance Act 1997 (c. 16), ss. 99(3), 113, Sch. 18 Pt. VII Note 2

F27 Words in s. 70(9) repealed (with effect as mentioned in s. 134(5) of the amending Act) by Finance Act 2000 (c. 17), ss. 134(3), 156, Sch. 40 Pt. III Note 2

F28 Words in s. 70(9) substituted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 7

F29 S. 70(9A) inserted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 15(4) (with Sch. 32 para. 23)

71 Clearance services: notification U.K.

(1) A person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities of a company incorporated in the United Kingdom shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first provides such clearance services.

(2) A person whose business includes (but does not exclusively consist of) holding relevant securities (being securities of a company incorporated in the United Kingdom)—

(a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that),

shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first holds such relevant securities as such a nominee or agent and for such purposes.

(3) A company which is incorporated in the United Kingdom and becomes aware that any shares in the company are held by a person such as is mentioned in subsection (1) or (2) above shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which the company first becomes aware of that fact.

(4) A person who fails to comply with subsection (1) or (2) above shall be liable to a [F30 penalty] not exceeding £1,000.

(5) A company which fails to comply with subsection (3) above shall be liable to a [F30 penalty] not exceeding £100.

(6) F31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F30 Word in s. 71(4)(5) substituted (with effect as mentioned in s. 114(2) of the amending Act) by Finance Act 1999 (c. 16), s. 114(1), Sch. 17 para. 8

F31 S. 71(6) repealed (with effect as mentioned in Sch. 20 Pt. V(3) Note of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(3)

72 Clearance services: supplementary U.K.

(1) References in sections 70 and 71 above to relevant securities, or to relevant securities of a company, are to shares in or stock or marketable securities of any company (which, unless otherwise stated, need not be incorporated in the United Kingdom).

(2) For the purposes of section 70(3) above the value of securities at the date the instrument is executed shall be taken to be the price they might reasonably be expected to fetch on a sale at that time in the open market.

(3) F32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) F33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F32 S. 72(3) repealed (with effect as mentioned in Sch. 20 Pt. V(1) Notes 1, 2 of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(1)

F33 S. 72(4) repealed (with application as mentioned in s. 99(5) of the amending Act) by Finance Act 1997 (c. 16), ss. 99(4)(b), 113, Sch. 18 Pt. VII

[F34 Transfers between depositary receipt system and clearance system] U.K.

Textual Amendments

F34 S. 72A and cross-heading inserted (28.7.2000 with effect as mentioned in s. 134(5)(a) of the amending Act) by 2000 c. 17, s. 134(1)(5) (which inserting provision is repealed by 2000 c. 17, s. 156, Sch. 40 Pt. III Note 3)

[F35 72A Transfers between depositary receipt system and clearance system. U.K.

(1) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom between a depositary receipt system and a clearance system—

(a) the provisions of section 67(2) to (5) or, as the case may be, section 70(2) to (5) above shall not apply, and

[F36 (b) stamp duty is not chargeable on the instrument.]

(2) A transfer between a depositary receipt system and a clearance system means a transfer—

(a) from (or to) a company that at the time of the transfer falls within section 67(6) above, and

(b) to (or from) a company that at that time falls within section 70(6) above.

(3) This section does not apply to a transfer from a clearance system (that is, from such a company as is mentioned in subsection (2)(b) above) if at the time of the transfer an election is in force under section 97A below in relation to the clearance services for the purposes of which the securities are held immediately before the transfer.]

Textual Amendments

F35 S. 72A and cross-heading inserted (28.7.2000 with effect as mentioned in s. 134(5)(a) of the amending Act) by 2000 c. 17, s. 134(1)(5) (which inserting provision is repealed by 2000 c. 17, s. 156, Sch. 40 Pt. III Note 3)

F36 S. 72A(1)(b) substituted (with effect in accordance with s. 99(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 32 para. 8

Reconstructions and acquistions U.K.

F37 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F37 S. 73 repealed by Finance Act 1986 (c. 41, SIF 114), s. 114, Sch. 23 Pt. IX(1) Note 1

74 Reconstructions etc: repeals. U.K.

(1) The following provisions shall cease to have effect—

(a) section 55 of the M2 Finance Act 1927 and section 4 of the M3 Finance Act (Northern Ireland) 1928 (reconstructions and amalgamations);

(b) paragraph 12(1) and (1A) of Schedule 18 to the M4 Finance Act 1980 (demergers);

(c) sections 78, 79 and 80 of the Finance Act 1985 (takeovers and winding-up).

(2) In paragraph 12(3) of Schedule 18 to the Finance Act 1980 for the words “sub-paragraph (2) above” there shall be substituted the words “this paragraph”.

(3) This section applies to any instrument executed in pursuance of a contract made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Marginal Citations

M2 1927 c. 10.

M3 1928 c. 9 (N.I.).

M4 1980 c. 48.

75 Acquisitions: reliefs. U.K.

(1) This section applies where a company (the acquiring company) acquires the whole or part of an undertaking of another company (the target company) in pursuance of a scheme for the reconstruction of the target company.

(2) If the first and second conditions (as defined below) are fulfilled, stamp duty under [F38 Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale)]shall not be chargeable on an instrument executed for the purposes of or in connection with the transfer of the undertaking or part.

(3) An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for that subsection or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.

(4) The first condition is F39 ... that the consideration for the acquisition—

(a) consists of or includes the issue of [F40 non-redeemable] shares in the acquiring company to all the shareholders of the target company;

(b) includes nothing else (if anything) but the assumption or discharge by the acquiring company of liabilities of the target company.

[F41 In paragraph (a) above, “non-redeemable shares” means shares which are not redeemable shares.]

(5) The second condition is that—

(a) the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, income tax, corporation tax or capital gains tax,

(b) after the acquisition has been made, each shareholder of each of the companies is a shareholder of the other, and

(c) after the acquisition has been made, the proportion of shares of one of the companies held by any shareholder is the same [F42 , or as nearly as may be the same,] as the proportion of shares of the other company held by that shareholder.

[F43 (5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsections (4) and (5) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).]

(6) This section applies to any instrument which is executed after 24th March 1986 unless it is executed in pursuance of an unconditional contract made on or before 18th March 1986.

(7) This section shall be deemed to have come into force on 25th March 1986.

Textual Amendments

F38 Words in s. 75(2) substituted (27.7.1999 with effect as mentioned in s. 112(6) of the amending Act) by Finance Act 1999 (c. 16), ss. 112(4)(6), Sch. 14 para. 14 (with s. 122)

F39 Words in s. 75(4) repealed (with effect in accordance with s. 169(5) of the amending Act) by Finance Act 2006 (c. 25), s. 169(2)(a), Sch. 26 Pt. 7(5)

F40 Words in s. 75(4)(a) inserted (28.7.2000 with effect as mentioned in s. 127(5) of the amending Act) by 2000 c. 17, s. 127(2)

F41 Words in s. 75(4) added (28.7.2000 with effect as mentioned in s. 127(5) of the amending Act) by 2000 c. 17, s. 127(3)

F42 Words in s. 75(5)(c) inserted (with effect in accordance with s. 169(5) of the amending Act) by Finance Act 2006 (c. 25), s. 169(2)(b)

F43 S. 75(5A) inserted (with effect in accordance with s. 74(4) of the amending Act) by Finance Act 2007 (c. 11), s. 74(1)

Modifications etc. (not altering text)

C1 S. 75 excluded (28.4.1997) by S.I. 1997/1156, reg. 12

76 Acquisitions: further provisions about reliefs. U.K.

(1) This section applies where a company (the acquiring company) acquires the whole or part of an undertaking of another company (the target company).

(2) If [F44 the first and second conditions (as defined below)] is fulfilled, and stamp duty under [F45 Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale)] is chargeable on an instrument executed for the purposes of or in connection with—

(a) the transfer of the undertaking or part, or

(b) the assignment to the acquiring company by a creditor of the target company of any relevant debts (secured or unsecured) owed by the target company,

the rate at which the duty is charged under that heading shall not exceed that mentioned in subsection (4) below.

(3) [F46 The first condition] is F47 ... that the consideration for the acquisition—

(a) consists of or includes the issue of [F48 non-redeemable shares (within the meaning of section 75(4)(a) above)] in the acquiring company to the target company or to all or any of its shareholders;

(b) includes nothing else (if anything) but cash not exceeding 10 per cent. of the nominal value of those shares, or the assumption or discharge by the acquiring company of liabilities of the target company, or both.

[F49 (3A) The second condition applies only in relation to an instrument transferring land in the United Kingdom and is that the acquiring company is not associated with another company that is a party to arrangements with the target company relating to shares of the acquiring company issued in connection with the transfer of the undertaking or part.

F49 (3B) Where an instrument transfers land in the United Kingdom together with other property, the provisions of this section apply as if there were two separate instruments, one relating to land in the United Kingdom and the other relating to other property.]

(4) The rate is the rate of [F50 0.5%] of the amount or value of the consideration for the sale to which the instrument gives effect.

(5) An instrument on which, by virtue only of [F51 this section], the rate at which stamp duty is charged is not to exceed that mentioned in subsection (4) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for [F51 this section] or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is duly stamped.

(6) In subsection (2)(b) above “relevant debts” means—

(a) any debt in the case of which the assignor is a bank or trade creditor, and

(b) any other debt incurred not less than two years before the date on which the instrument is executed.

[F52 (6A) For the purposes of subsection (3A) above—

(a) companies are associated if one has control of the other or both are controlled by the same person or persons, and

(b) “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

The references in paragraph (a) above to control shall be construed in accordance with section 416 of the Taxes Act 1988.]

(7) This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Textual Amendments

F44 Words in s. 76(2) substituted (retrospective to 24.4.2002 and with application as mentioned in s. 112(7)(8) of the amending Act) by 2002 c. 23, s. 112(1)(2)(7)-(9)

F45 Words in s. 76(2) substituted (27.7.1999 with effect as mentioned in s. 112(6) of the amending Act) by 1999 c. 16, ss. 112(4)(6), 122, Sch. 14 para. 15(2)

F46 Words in s. 76(3) substituted (retrospective to 24.4.2002 and with application as mentioned in s. 112(7)(8) of the amending Act) by 2002 c. 23, s. 112(1)(3)(7)-(9)

F47 Words in s. 76(3) repealed (with effect in accordance with s. 169(5) of the amending Act) by Finance Act 2006 (c. 25), s. 169(3), Sch. 26 Pt. 7(5)

F48 Words in s. 76(3)(a) substituted (28.7.2000 with effect as mentioned in s. 127(5) of the amending Act) by 2000 c.17, s. 127(4)

F49 S. 76(3A)(3B) inserted (retrospective to 24.4.2002 and with application as mentioned in s. 112(7)(8) of the amending Act) by 2002 c. 23, s. 112(1)(4)(7)-(9)

F50 Words in s. 76(4) substituted (27.7.1999 with effect as mentioned in s. 112(6) of the amending Act) by 1999 c. 16, ss. 112(4)(6), 122, Sch. 14 para. 15(3)

F51 Words in s. 76(5) substituted (retrospective to 24.4.2002 and with application as mentioned in s. 112(7)(8) of the amending Act) by 2002 c. 23, s. 112(1)(5)(7)-(9)

F52 S. 76(6A) inserted (retrospective to 24.4.2002 and with application as mentioned in s. 112(7)(8) of the amending Act) by 2002 c. 23, s. 112(1)(6)-(9)

Modifications etc. (not altering text)

C2 S. 76 excluded (28.4.1997) by S.I. 1997/1156, reg. 12

S. 76 restricted (retrospective to 24.4.2002) by Finance Act 2002 (c. 23), s. 113(1)(a)(9)

77 Acquisition of target company's share capital U.K.

(1) Stamp duty under [F53 Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale)] shall not be chargeable on an instrument transferring shares in one company (the target company) to another company (the acquiring company) if the conditions mentioned in subsection (3) below are fulfilled.

(2) An instrument on which stamp duty is not chargeable by virtue only of subsection (1) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for that subsection or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.

(3) The conditions are that —

F54 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the transfer forms part of an arrangement by which the acquiring company acquires the whole of the issued share capital of the target company,

(c) the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, stamp duty reserve tax, income tax, corporation tax or capital gains tax,

(d) the consideration for the acquisition consists only of the issue of shares in the acquiring company to the shareholders of the target company,

(e) after the acquisition has been made, each person who immediately before it was made was a shareholder of the target company is a shareholder of the acquiring company,

(f) after the acquisition has been made, the shares in the acquiring company are of the same classes as were the shares in the target company immediately before the acquisition was made,

(g) after the acquisition has been made, the number of shares of any particular class in the acquiring company bears to all the shares in that company the same proportion [F55 , or as nearly as may be the same proportion,] as the number of shares of that class in the target company bore to all the shares in that company immediately before the acquisition was made, and

(h) after the acquisition has been made, the proportion of shares of any particular class in the acquiring company held by any particular shareholder is the same [F56 , or as nearly as may be the same,] as the proportion of shares of that class in the target company held by him immediately before the acquisition was made.

[F57 (3A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsection (3) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).]

(4) In this section references to shares and to share capital include references to stock.

(5) This section applies to any instrument executed on or after 1st August 1986.

Textual Amendments

F53 Words in s. 77(1) substituted (with effect as mentioned in s. 112(6) of the amending Act) by Finance Act 1999 (c. 16), ss. 112(4), Sch. 14 para. 16 (with s. 122)

F54 S. 77(3)(a) repealed (with effect in accordance with s. 169(5) of the amending Act) by Finance Act 2006 (c. 25), s. 169(4)(a), Sch. 26 Pt. 7(5)

F55 Words in s. 77(3)(g) inserted (with effect in accordance with s. 169(5) of the amending Act) by Finance Act 2006 (c. 25), s. 169(4)(b)

F56 Words in s. 77(3)(h) inserted (with effect in accordance with s. 169(5) of the amending Act) by Finance Act 2006 (c. 25), s. 169(4)(c)

F57 S. 77(3A) inserted (with effect in accordance with s. 74(4) of the amending Act) by Finance Act 2007 (c. 11), s. 74(2)

Modifications etc. (not altering text)

C3 S. 77 excluded (28.4.1997) by S.I. 1997/1156, reg. 12

Loan capital, letters of allotment etc. U.K.

78 Loan capital. U.K.

F58 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In this section “loan capital” means—

(a) any debenture stock, corporation stock or funded debt, by whatever name known, issued by a body corporate or other body of persons (which here includes a local authority and any body whether formed or established in the United Kingdom or elsewhere);

(b) any capital raised by such a body if the capital is borrowed or has the character of borrowed money, and whether it is in the form of stock or any other form;

(c) stock or marketable securities issued by the government of any country or territory outside the United Kingdom;

[F59 (d) any capital raised under arrangements which fall within section 48A of the Finance Act 2005 [F60 or section 507 of the Corporation Tax Act 2009] (alternative finance investment bonds).]

F58 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) In this section “designated international organisation” means an international organisation designated for the purposes of section [F61 324 of the Taxes Act 1988] by an order made under subsection (1) of that section.

F58 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F58 S. 78(1)-(6)(8)(10)-(14) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. V(2) Notes 1, 2 of the amending Act) by 1999 c. 16, s. 139, Sch. 20 Pt. V(2)

F59 S. 78(7)(d) inserted (with effect in accordance with s. 154(5) of the amending Act) by Finance Act 2008 (c. 9), s. 154(2)

F60 Words in s. 78(7)(d) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 323 (with Sch. 2 Pts. 1, 2)

F61 Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 29 para. 32

79 Loan capital: new provisions. U.K.

F62 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Stamp duty under [F63 Schedule 15 to the Finance Act 1999 (bearer instruments)] shall not be chargeable on the issue of an instrument which relates to loan capital or on the transfer of the loan capital constituted by, or transferable by means of, such an instrument.

(3) Stamp duty shall not be chargeable on an instrument which transfers loan capital issued or raised by —

(a) the financial support fund of the Organisation for Economic Co-operation and Development,

(b) the Inter-American Development Bank, or

(c) an organisation which was a designated international organisation at the time of the transfer (whether or not it was such an organisation at the time the loan capital was issued or raised).

(4) Subject to subsections (5) and (6) below, stamp duty shall not be chargeable on an instrument which transfers any other loan capital.

(5) Subsection (4) above does not apply to an instrument transferring loan capital which, at the time the instrument is executed, carries a right (exercisable then or later) of conversion into shares or other securities, or to the acquisition of shares or other securities, including loan capital of the same description.

(6) Subject to [F64 subsections (7) to (7B)] below, subsection (4) above does not apply to an instrument transferring loan capital which, at the time the instrument is executed or any earlier time, carries or has carried —

(a) a right to interest the amount of which exceeds a reasonable commercial return on the nominal amount of the capital,

(b) a right to interest the amount of which falls or has fallen to be determined to any extent by reference to the results of, or of any part of, a business or to the value of any property, or

(c) a right on repayment to an amount which exceeds the nominal amount of the capital and is not reasonably comparable with what is generally repayable (in respect of a similar nominal amount of capital) under the terms of issue of loan capital listed in the Official List of The Stock Exchange.

(7) Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(a) or (c) above by reason only that the loan capital concerned carries a right to interest, or (as the case may be) to an amount payable on repayment, determined to any extent by reference to an index showing changes in the general level of prices payable in the United Kingdom over a period substantially corresponding to the period between the issue or raising of the loan capital and its repayment.

[F65 (7A) Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(b) above by reason only that the loan capital concerned carries a right to interest which—

(a) reduces in the event of the results of a business or part of a business improving, or the value of any property increasing, or

(b) increases in the event of the results of a business or part of a business deteriorating, or the value of any property diminishing.]

[F66 (7B) Subsection (4) shall not be prevented from applying to a capital market instrument by virtue of subsection (6)(b) by reason only that the capital market investment concerned carries or has carried a right to interest which ceases or reduces if, or to the extent that, the issuer, after meeting or providing for other obligations specified in the capital market arrangement concerned, has insufficient funds available from that capital market arrangement to pay all or part of the interest otherwise due.]

[F67 (8) Where stamp duty is chargeable under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) on an instrument which transfers loan capital, the rate at which duty is charged under that Part shall be 0.5% of the amount or value of the consideration for the sale to which the instrument gives effect.]

[F68 (8A) In the application of this section to loan capital that falls within paragraph (d) of section 78(7) (alternative finance investment bonds)—

(a) subsection (6) has effect as if—

(i) paragraph (a) were omitted, and

(ii) for paragraph (c) there were substituted—

“(c) a right at the end of the bond term (within the meaning of section 48A(1) of the Finance Act 2005 [F69 or section 507(1) of the Corporation Tax Act 2009]) to a payment of an amount that exceeds the aggregate of—

(i) the amount paid for the issue of the bond, and

(ii) the notional payment amount;

and for this purpose the “notional payment amount” means the amount of the payments that would represent a reasonable commercial return (within the meaning of section 48A(1) of the Finance Act 2005 [F69 or section 507(1) of the Corporation Tax Act 2009]) on the bond over the bond term, less the amount of the payments actually made.”,

(b) subsections (6)(b), (7), (7A), (7B) and (13) have effect as if references to interest were references to additional payments (“additional payments” having the same meaning as in section 48A of the Finance Act 2005 [F70 or section 507 of the Corporation Tax Act 2009]), and

(c) subsections (7B) and (13) also have effect as if—

(i) references to a capital market investment were references to the loan capital falling within paragraph (d) of section 78(7), and

(ii) references to a capital market arrangement were to the arrangements under which that loan capital is raised.]

F62 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F62 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F62 (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) Subsections (7), (9) F71 . . . of section 78 above shall apply as if references to that section included references to this.

[F72 (13) In this section—

• “capital market instrument” means an instrument transferring a capital market investment issued as part of a capital market arrangement, and

• “capital market investment” and “capital market arrangement” have the same meaning as in section 72B of the Insolvency Act 1986 (see paragraphs 1 to 3 of Schedule 2A to that Act).]

Textual Amendments

F62 S. 79(1)(9)-(11) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. V(2) Notes 1, 2 of the amending Act) by Finance Act 1999 (c. 16), s. 138, Sch. 20 Pt. V(2)

F63 Words in s. 79(2) substituted (with application as mentioned in s. 113(4) of the amending Act) by Finance Act 1999 (c. 16), s. 113(3), Sch. 16 para. 5

F64 Words in s. 79(6) substituted (with effect in accordance with s. 101(5) of the amending Act) by Finance Act 2008 (c. 9), s. 101(2)

F65 S. 79(7A) inserted (with effect as mentioned in s. 133(2)(3) of the amending Act) by Finance Act 2000 (c. 17), s. 133(1)

F66 S. 79(7B) inserted (with effect in accordance with s. 101(5) of the amending Act) by Finance Act 2008 (c. 9), s. 101(3)

F67 S. 79(8) substituted (with effect as mentioned in s. 112(6) of the amending Act) by Finance Act 1999 (c. 16), s. 112(4), Sch. 14 para. 17 (with s. 122)

F68 S. 79(8A) inserted (with effect in accordance with s. 154(5) of the amending Act) by Finance Act 2008 (c. 9), s. 154(3)

F69 Words in s. 79(8A)(a)(ii) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 324(a) (with Sch. 2 Pts. 1, 2)

F70 Words in s. 79(8A)(b) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 324(b) (with Sch. 2 Pts. 1, 2)

F71 Words in s. 79(12) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. V(2) Notes 1, 2 of the amending Act) by Finance Act 1999 (c. 16), s. 139, Sch. 20 Pt. V(2)

F72 S. 79(13) inserted (with effect in accordance with s. 101(5) of the amending Act) by Finance Act 2008 (c. 9), s. 101(4)

F73 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F73 Ss. 80-84 repealed by Finance Act 1990 (c. 29, SIF 114), s. 132, Sch. 19 Pt. VI; and the repealed ss. 80-83 are subject to further amendments by: S.I. 1992/3286, reg. 2; 1997 c. 16, ss. 97, 98, 113, Sch. 18 Pt. VIII, Notes 1, 3, 4; S.I. 1998/3177, regs. 25, 27, 29; 1999 c. 16, ss. 112(4)(6), 122, 139, Sch. 14 paras. 18, 19, Sch. 20 Pt. V(2), Notes 1, 2 (which amending Sch. 14 paras. 18, 19 are repealed by 1999 c. 16, ss. 123(3)(4), 139, Sch. 20 Pt. V(6) Note); and S.I. 2001/3629, arts. 7, 109, Sch.

[F74 80A Sales to intermediaries. U.K.

[F75 (1) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a regulated market on which stock of that kind is regularly traded; and

(b) the person is an intermediary and is recognised as such by the market in accordance with arrangements approved by the Commissioners.

(1A) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a multilateral trading facility, or a recognised foreign exchange, on which stock of that kind is regularly traded;

(b) the person is an intermediary and is recognised as such by the facility or exchange in accordance with arrangements approved by the Commissioners; and

(c) the sale is effected on the facility or exchange.

(1B) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an intermediary who is approved for the purposes of this section by the Commissioners; and

(b) stock of that kind is regularly traded on a regulated market.

(1C) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an intermediary who is approved for the purposes of this section by the Commissioners;

(b) stock of that kind is regularly traded on a multilateral trading facility or a recognised foreign exchange; and

(c) the sale is effected on the facility or exchange.

(2) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;

(c) the person is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and

(d) stock of that kind is regularly traded on a regulated market.

(2A) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;

(c) the person is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and

(d) the sale is effected on a relevant qualifying exchange on which stock of that kind is regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that exchange;

and in paragraph (d) “relevant qualifying exchange” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.

(2B) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an options intermediary who is approved for the purposes of this section by the Commissioners;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and

(c) stock of that kind is regularly traded on a regulated market.

(2C) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an options intermediary who is approved for the purposes of this section by the Commissioners;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and

(c) the sale is effected on a relevant qualifying exchange on which stock of that kind is regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that exchange;

and in paragraph (c) “relevant qualifying exchange” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.]

(4) For the purposes of this section—

(a) an intermediary is a person who carries on a bona fide business of dealing in stock and does not carry on an excluded business; and

(b) an options intermediary is a person who carries on a bona fide business of dealing in quoted or listed options to buy or sell stock and does not carry on an excluded business.

(5) The excluded businesses are the following—

(a) any business which consists wholly or mainly in the making or managing of investments;

(b) any business which consists wholly or mainly in, or is carried on wholly or mainly for the purpose of, providing services to persons who are connected with the person carrying on the business;

(c) any business which consists in insurance business;

(d) any business which consists in managing or acting as trustee in relation to a pension scheme or which is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme;

(e) any business which consists in operating or acting as trustee in relation to a collective investment scheme or is carried on by the operator or trustee of such a scheme in connection with or for the purposes of the scheme.

(6) A sale is effected on [F76 a facility or] an exchange for the purposes of [F77 this section] if (and only if)—

(a) it is subject to the rules of [F78 the facility or exchange]; and

(b) it is reported to [F78 the facility or exchange] in accordance with the rules of [F78 the facility or exchange].

[F79 (6A) The Commissioners may approve a person for the purposes of this section only if the person is authorised under the law of an EEA State to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account), whether or not the person is authorised under the Directive.]

(7) An instrument on which stamp duty is not chargeable by virtue only of this section shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the M5 Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.]

Textual Amendments

F74 S. 80A inserted (20.10.1997) by 1997 c. 16, s. 97(1)(4); S.I. 1997/2428, art. 2

F75 S. 80A(1)-(2C) substituted for s. 80A(1)-(3) (with effect in accordance with Sch. 21 para. 1(5) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 1(2)

F76 Words in s. 80A(6) inserted (with effect in accordance with Sch. 21 para. 1(5) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 1(3)(a)

F77 Words in s. 80A(6) substituted (with effect in accordance with Sch. 21 para. 1(5) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 1(3)(b)

F78 Words in s. 80A(6) substituted (with effect in accordance with Sch. 21 para. 1(5) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 1(3)(c)

F79 S. 80A(6A) inserted (with effect in accordance with Sch. 21 para. 1(5) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 1(4)

Modifications etc. (not altering text)

C4 S. 80A extended (12.10.2004) by The Stamp Duty and Stamp Duty Reserve Tax (Extension of Exceptions relating to Recognised Exchanges) Regulations 2004 (S.I. 2004/2421), art. 1, reg. 2

C5 S. 80A: power to extend conferred (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 50(1)-(4)

C6 S. 80A extended (with modifications) (11.8.2005) by The Stamp Duty and Stamp Duty Reserve Tax (Extension of Exceptions relating to Recognised Exchanges) Regulations 2005 (S.I. 2005/1990), regs. 1, 2-7

C7 S. 80A extended (16.2.2006) by The Stamp Duty and Stamp Duty Reserve Tax (Extension of Exceptions relating to Recognised Exchanges) Regulations 2006 (S.I. 2006/139), regs. 1, 2(1)

C8 S. 80A: power to extend conferred (24.7.2002) by 2002 c. 23, s. 117(2)

C9 S. 80A extended (26.7.2002) by S.I. 2002/1975, reg. 2

Marginal Citations

M5 1891 c. 39.

[F80 80B Intermediaries: supplementary. U.K.

(1) For the purposes of section 80A above the question whether a person is connected with another shall be determined in accordance with the provisions of section 839 of the M6 Income and Corporation Taxes Act 1988.

F81 (2) In section 80A above and this section—

• “collective investment scheme” has the meaning given in section 75 of the M7 Financial Services Act 1986;

• [F82 “the Directive” means Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, as amended from time to time;]

• F83 ...

• “EEA State” [F84 , in relation to any time, means a State which at that time is a member State or any other State which at that time] is a contracting party to the agreement on the European Economic Area signed at Oporto on the 2nd May 1992 as adjusted by the Protocol signed at Brussels on the 17th March 1993 [F85 (as modified or supplemented from time to time)];

• “insurance business” means long term business or general business as defined in section 1 of the M8 Insurance Companies Act 1982;

• “quoted or listed options” means options which are quoted on or listed by an EEA exchange or a recognised foreign options exchange;

• “stock” includes any marketable security;

• “trustee” and “the operator” shall, in relation to a collective investment scheme, be construed in accordance with section 75(8) of the Financial Services Act 1986.

[F86 (2A) Each of the following expressions—

• “multilateral trading facility”, and

• “regulated market”,

has the same meaning in section 80A above as it has for the purposes of the Directive.]

(3) In section 80A above “recognised foreign exchange” means a market which—

(a) is not in an EEA State; and

(b) is specified in regulations made by the Treasury under this subsection.

(4) In section 80A above and this section “recognised foreign options exchange” means a market which—

(a) is not in an EEA State; and

(b) is specified in regulations made by the Treasury under this subsection.

(5) In section 80A above “the exercise of a relevant option” means—

(a) the exercise by the options intermediary concerned of an option to buy stock; or

(b) the exercise of an option binding the options intermediary concerned to buy stock.

[F87 (5A) The Treasury may by regulations amend section 80A above and this section (as they have effect for the time being) in order to extend the exemption from duty under that section.]

(6) The Treasury may by regulations provide that section 80A above shall not have effect in relation to instruments executed in pursuance of kinds of agreement specified in the regulations.

(7) The Treasury may by regulations provide that if—

(a) an instrument falls within [F88 any of subsections (1) to (2C)] of section 80A above, and

(b) stamp duty would be chargeable on the instrument apart from that section,

stamp duty shall be chargeable on the instrument at a rate, specified in the regulations, which shall not exceed 10p for every £100 or part of £100 of the consideration for the sale.

(8) The Treasury may by regulations change the meaning of “intermediary” or “options intermediary” for the purposes of section 80A above by amending subsection (4) or (5) of that section (as it has effect for the time being).

(9) The power to make regulations under subsections (3) to (8) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.]

Textual Amendments

F80 S. 80B inserted (20.10.1997) by 1997 c. 16, s. 97(1)(4); S.I. 1997/2428, art. 2

F81 Words in s. 80B(2) substituted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), reg. 1(2), Sch. 6 para. 8(2)

F82 Words in s. 80B(2) inserted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 21 para. 2(2)(a)

F83 Words in s. 80B(2) repealed (with effect in accordance with Sch. 21 para. 2(6) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 2(2)(b), Sch. 27 Pt. 4(2)

F84 Words in s. 80B(2) substituted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 21 para. 2(2)(c)

F85 Words in s. 80B(2) inserted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 21 para. 2(2)(c)

F86 S. 80B(2A) inserted (with effect in accordance with Sch. 21 para. 2(6) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 2(3)

F87 S. 80B(5A) inserted (with effect in accordance with Sch. 21 para. 2(6) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 2(4)

F88 Words in s. 80B(7) substituted (with effect in accordance with Sch. 21 para. 2(6) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 2(5)

Marginal Citations

M6 1988 c. 1.

M7 1986 c. 60.

M8 1982 c. 50.

[F89 80C Repurchases and stock lending. U.K.

(1) This section applies where a person (A) has entered into an arrangement with another person (B) under which—

(a) B is to transfer stock of a particular kind to A or his nominee, and

(b) stock of the same kind and amount is to be transferred by A or his nominee to B or his nominee,

and the conditions set out in subsection [F90 (2A) or] (3) below are fulfilled.

(2) Stamp duty shall not be chargeable on an instrument transferring stock to B or his nominee or A or his nominee in accordance with the arrangement.

[F91 (2A) The conditions in this subsection are—

(a) that A or B is authorised under the law of an EEA State to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account) in relation to stock of the kind concerned, whether or not A or B is authorised under the Directive; and

(b) that stock of the kind concerned is regularly traded on a regulated market.]

(3) The conditions [F92 in this subsection] are—

(a) that the arrangement is effected on [F93 a regulated market, a multilateral trading facility] or a recognised foreign exchange; and

(b) that stock of the kind concerned is regularly traded on that [F94 market, facility or] exchange.

(4) An arrangement does not fall within subsection (1) above if—

(a) the arrangement is not such as would be entered into by persons dealing with each other at arm’s length; or

(b) under the arrangement any of the benefits or risks arising from fluctuations, before the transfer to B or his nominee takes place, in the market value of the stock accrues to, or falls on, A.

(5) An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the M9 Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.

(6) An arrangement is effected on [F95 a market, a facility or] an exchange for the purposes of subsection (3) above if (and only if)—

(a) it is subject to the rules of [F96 the market, facility or exchange]; and

(b) it is reported to [F96 the market, facility or exchange] in accordance with the rules of [F96 the market, facility or exchange].

(7) In this section—

• [F97 “the Directive” has the meaning given in section 80B(2) above;]

• [F97 “EEA State” has the meaning given in section 80B(2) above;]

• F98 ...

• “recognised foreign exchange” has the meaning given in section 80B(3) above.

[F99 (7A) Each of the following expressions—

• “multilateral trading facility”, and

• “regulated market”,

has the same meaning in this section as it has for the purposes of the Directive.]

(8) The Treasury may by regulations provide that if stamp duty would be chargeable on an instrument but for subsection (2) above, stamp duty shall be chargeable on the instrument at a rate, specified in the regulations, which shall not exceed 10p for every £100 or part of £100 of the consideration for the transfer.

(9) The Treasury may by regulations amend this section (as it has effect for the time being) in order—

(a) to change the conditions for exemption from duty under this section; or

(b) to provide that this section does not apply in relation to kinds of arrangement specified in the regulations.

(10) The power to make regulations under subsection (8) or (9) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.]

Textual Amendments

F89 S. 80C inserted (20.10.1997) by 1997 c. 16, s. 98(1)(3); S.I. 1997/2428, art. 2

F90 Words in s. 80C(1) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(2)

F91 S. 80C(2A) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(3)

F92 Words in s. 80C(3) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(4)(a)

F93 Words in s. 80C(3) substituted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(4)(b)

F94 Words in s. 80C(3) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(4)(c)

F95 Words in s. 80C(6) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(5)(a)

F96 Words in s. 80C(6) substituted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(5)(b)

F97 Words in s. 80C(7) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(6)(a)

F98 Words in s. 80C(7) repealed (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(6)(b), Sch. 27 Pt. 4(2)

F99 S. 80C(7A) inserted (with effect in accordance with Sch. 21 para. 5(8) of the amending Act) by Finance Act 2007 (c. 11), Sch. 21 para. 5(7)

Modifications etc. (not altering text)

C10 S. 80C extended (12.10.2004) by The Stamp Duty and Stamp Duty Reserve Tax (Extension of Exceptions relating to Recognised Exchanges) Regulations 2004 (S.I. 2004/2421), art. 1, reg. 2

C11 S. 80C: power to extend conferred (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 50(1)-(4)

C12 S. 80C extended (with modifications) (11.8.2005) by The Stamp Duty and Stamp Duty Reserve Tax (Extension of Exceptions relating to Recognised Exchanges) Regulations 2005 (S.I. 2005/1990), regs. 1, 2-7

C13 S. 80C extended (16.2.2006) by The Stamp Duty and Stamp Duty Reserve Tax (Extension of Exceptions relating to Recognised Exchanges) Regulations 2006 (S.I. 2006/139), regs. 1, 2(1)

C14 S. 80C: power to extend conferred (24.7.2002) by 2002 c. 23, s. 117(2)

C15 S. 80C extended (26.7.2002) by S.I. 2002/1975, art. 2

Marginal Citations

M9 1891 c. 39.

[F100 80D Repurchases and stock lending: replacement stock on insolvency U.K.

(1) This section applies where—

(a) A and B have entered into an arrangement falling within section 80C(1),

(b) the conditions in subsection (2A) or (3) of that section are met,

(c) stock is transferred to A or A's nominee, and

(d) the conditions in subsection (2) below are met.

(2) The conditions in this subsection are that—

(a) A and B are not connected persons within the meaning of section 839 of the Taxes Act 1988,

(b) after B has transferred stock under the arrangement, A or B becomes insolvent,

(c) it becomes apparent (whether before or after the insolvency occurs) that, as a result of the insolvency, stock will not be transferred to B or B's nominee in accordance with the arrangement,

(d) the party who does not become insolvent (“the solvent party”) or the solvent party's nominee acquires replacement stock, and

(e) the replacement stock is acquired before the end of the period of 30 days beginning with the day on which the insolvency occurs (“the insolvency date”).

(3) Where collateral is provided under the arrangement (or under arrangements of which that arrangement forms part), stamp duty is not chargeable on any instrument transferring to the solvent party or the solvent party's nominee—

(a) replacement stock acquired using the collateral (whether directly or indirectly), or

(b) where the solvent party uses the whole of the value of the collateral to acquire replacement stock, any further replacement stock.

(4) Where no collateral is provided as mentioned in subsection (3), stamp duty is not chargeable on any instrument transferring replacement stock to the solvent party or the solvent party's nominee.

(5) Subsections (3) and (4) may apply as regards more than one instrument (and where those subsections apply as regards more than one instrument, the instruments may be executed by different persons).

(6) But those subsections apply only as regards replacement stock up to the amount of stock which will not be transferred as a result of the insolvency.

(7) An instrument on which stamp duty is not chargeable by virtue only of subsection (3) or (4) is not to be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty.

(8) Despite section 122(1) of the Stamp Act 1891, the stamp mentioned in subsection (7) may be a stamp of such kind as the Commissioners for Her Majesty's Revenue and Customs may prescribe.

(9) For the purposes of this section a person becomes insolvent—

(a) if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,

(b) if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,

(c) on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,

(d) if an individual voluntary arrangement takes effect under Part 8 of that Act,

(e) on the presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),

(f) if a compromise or arrangement takes effect under Part 26 of the Companies Act 2006,

(g) if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,

(h) if a bank administration order takes effect under Part 3 of that Act, or

(i) on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.

(10) In this section—

• “collateral” means an amount of money or other property which is payable to, or made available for the benefit of, a party to an arrangement or that party's nominee for the purpose of securing the discharge of the requirement to transfer stock to that party or the nominee;

• “replacement stock”, in the event of a party to an arrangement becoming insolvent, is stock of the same kind as the stock which will not be transferred to the other party or that party's nominee as a result of the insolvency.]

Textual Amendments

F100 S. 80D inserted (with effect in accordance with s. 83(2)(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 37 para. 2

F101 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F101 Ss. 80-84 repealed by Finance Act 1990 (c. 29, SIF 114), s. 132, Sch. 19 Pt. VI; and the repealed ss. 80-83 are subject to further amendments by: S.I. 1992/3286, reg. 2; 1997 c. 16, ss. 97, 98, 113, Sch. 18 Pt. VIII, Notes 1, 3, 4; S.I. 1998/3177, regs. 25, 27, 29; 1999 c. 16, ss. 112(4)(6), 122, 139, Sch. 14 paras. 18, 19, Sch. 20 Pt. V(2), Notes 1, 2 (which amending Sch. 14 paras. 18, 19 are repealed by 1999 c. 16, ss. 123(3)(4), 139, Sch. 20 Pt. V(6) Note); and S.I. 2001/3629, arts. 7, 109, Sch.

F102 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F102 Ss. 80-84 repealed by Finance Act 1990 (c. 29, SIF 114), s. 132, Sch. 19 Pt. VI; and the repealed ss. 80-83 are subject to further amendments by: S.I. 1992/3286, reg. 2; 1997 c. 16, ss. 97, 98, 113, Sch. 18 Pt. VIII, Notes 1, 3, 4; S.I. 1998/3177, regs. 25, 27, 29; 1999 c. 16, ss. 112(4)(6), 122, 139, Sch. 14 paras. 18, 19, Sch. 20 Pt. V(2), Notes 1, 2 (which amending Sch. 14 paras. 18, 19 are repealed by 1999 c. 16, ss. 123(3)(4), 139, Sch. 20 Pt. V(6) Note); and S.I. 2001/3629, arts. 7, 109, Sch.

F103 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F103 Ss. 80-84 repealed by Finance Act 1990 (c. 29, SIF 114), s. 132, Sch. 19 Pt. VI; and the repealed ss. 80-83 are subject to further amendments by: S.I. 1992/3286, reg. 2; 1997 c. 16, ss. 97, 98, 113, Sch. 18 Pt. VIII, Notes 1, 3, 4; S.I. 1998/3177, regs. 25, 27, 29; 1999 c. 16, ss. 112(4)(6), 122, 139, Sch. 14 paras. 18, 19, Sch. 20 Pt. V(2), Notes 1, 2 (which amending Sch. 14 paras. 18, 19 are repealed by 1999 c. 16, ss. 123(3)(4), 139, Sch. 20 Pt. V(6) Note); and S.I. 2001/3629, arts. 7, 109, Sch.

F104 84 Miscellaneous exemptions U.K.

(1) In section 127(1) of the Finance Act 1976 M10 (no stamp duty on transfer to stock exchange nominee executed for purposes of a stock exchange transaction) the words “ which is executed for the purposes of a stock exchange transaction ” shall be omitted.

(2) Stamp duty shall not be chargeable on an instrument effecting a transfer of stock if —

(a) the transferee is a recognised investment exchange or a nominee of a recognised investment exchange, and

(b) an agreement which relates to the stamp duty which would (apart from this subsection) be chargeable on the instrument, and was made between the Commissioners and the investment exchange under section 33 of the Finance Act 1970, is in force at the time of the transfer.

(3) Stamp duty shall not be chargeable on an instrument effecting a transfer of stock if —

(a) the transferee is a recognised clearing house or a nominee of a recognised clearing house, and

(b) an agreement which relates to the stamp duty which would (apart from this subsection) be chargeable on the instrument, and was made between the Commissioners and the clearing house under section 33 of the Finance Act 1970 M11 , is in force at the time of the transfer.

(4) Subsection (1) above applies to any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.

(5) Subsection (2) above applies to any instrument giving effect to a transaction carried out on or after such day as the Commissioners may appoint by order made by statutory instrument.

(6) Subsection (3) above applies to any instrument giving effect to a transaction carried out on or after such day as the Commissioners may appoint by order made by statutory instrument.

Textual Amendments

F104 Ss. 80-84 repealed by Finance Act 1990 (c. 29, SIF 114), s. 132, Sch. 19 Pt. VI; and the repealed ss. 80-83 are subject to further amendments by: S.I. 1992/3286, reg. 2; 1997 c. 16, ss. 97, 98, 113, Sch. 18 Pt. VIII, Notes 1, 3, 4; S.I. 1998/3177, regs. 25, 27, 29; 1999 c. 16, ss. 112(4)(6), 122, 139, Sch. 14 paras. 18, 19, Sch. 20 Pt. V(2), Notes 1, 2 (which amending Sch. 14 paras. 18, 19 are repealed by 1999 c. 16, ss. 123(3)(4), 139, Sch. 20 Pt. V(6) Note); and S.I. 2001/3629, arts. 7, 109, Sch.

Marginal Citations

M10 1976 c. 40.

M11 1970 c. 24.

85 Supplementary U.K.

(1) Section 42(1) of the Finance Act 1920 M12 (reduction of duty in case of certain transfers to jobbers or nominees or qualified dealers) shall have effect, in the case of any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms as if the following were omitted —

(a) in that subsection, the words “ a jobber or his nominee or to”and in the proviso to it the words “jobber or”(in each place);

(b) in subsection (3) of that section, paragraph (d) of the definition of “qualified dealer”(Stock Exchange brokers).

(2) Section 34 of the Finance Act 1961 M13 and section 4 of the Finance Act (Northern Ireland) 1961 M14 (borrowing of stock by jobbers) shall not apply where stock is transferred in discharge of an undertaking given on or after the day of The Stock Exchange reforms.

(3) Section 42(1) of the Finance Act 1920 shall not apply to any transfer giving effect to a transaction carried out on or after such day as is specified for this purpose in regulations made under section 81(5) above; and different days may be so specified for different purposes.

(4) Section 127(2) of the Finance Act 1976 M15 (transfer otherwise than on sale from stock exchange nominee to jobber) shall not apply to any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.

(5) In sections 81, 82 and 84 above and this section—

(a) “the day of The Stock Exchange reforms” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished,

(b) references to a recognised investment exchange are to a recognised investment exchange within the meaning [F105 given by section 285(1)(a) of the Financial Services and Markets Act 2000],

(c) references to a recognised clearing house are to a recognised clearing house within the meaning [F106 given by section 285(1)(b) of the Financial Services and Markets Act 2000], and

(d) “stock” includes marketable security.

Textual Amendments

F105 Words in s. 85(5)(b) substituted (with effect as mentioned in art. 8(4) of the amending S.I.) by S.I. 2001/3629, art. 8(2)

F106 Words in s. 85(5)(c) substituted (with effect as mentioned in art. 8(4) of the amending S.I.) by S.I. 2001/3629, art. 8(3)

Marginal Citations

M12 1920 c. 18.

M13 1961 c. 36.

M14 1961 c. 10 (N. I.).

M15 1976 c. 40.