(1)A tax, to be known as stamp duty reserve tax, shall be charged in accordance with this Part of this Act.
(2)The tax shall be under the care and management of the Board.
(3)Section 1 of the [1968 c. 2.] Provisional Collection of Taxes Act 1968 shall apply to the tax; and accordingly in subsection (1) of that section after the words "petroleum revenue tax" there shall be inserted the words "stamp duty reserve tax".
(1)This section applies where a person (A) agrees with another person (B) to transfer chargeable securities (whether or not to B) for consideration in money or money's worth.
(2)There shall be a charge to stamp duty reserve tax under this section on the expiry of the period of two months beginning with the relevant day, unless the agreement is to transfer the securities to B or his nominee and the first and second conditions mentioned below have been fulfilled by the time that period expires.
(3)In subsection (2) above "the relevant day" means—
(a)in a case where the agreement is conditional, the day on which the condition is satisfied, and
(b)in any other case, the day on which the agreement is made.
(4)The first condition is that an instrument is (or instruments are) executed in pursuance of the agreement and the instrument transfers (or the instruments between them transfer) to B or, as the case may be, to his nominee all the chargeable securities to which the agreement relates.
(5)The second condition is that the instrument (or each instrument) transferring the chargeable securities to which the agreement relates is duly stamped in accordance with the enactments relating to stamp duty if it is an instrument which, under those enactments, is chargeable with stamp duty or otherwise required to be stamped.
(6)Tax under this section shall be charged at the rate of 50p for every £100 or part of £100 of the amount or value of the consideration mentioned in subsection (1) above.
(7)For the purposes of subsection (6) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the agreement mentioned in subsection (1) above is made.
(8)In this section "the enactments relating to stamp duty" means the [1891 c. 39.] Stamp Act 1891 and any enactment which amends or is required to be construed together with that Act.
(9)This section applies where the agreement to transfer is 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.
(10)This section has effect subject to sections 88 to 90 below.
(1)An instrument on which stamp duty is not chargeable by virtue of—
(a)section 127(1) of the [1976 c. 40.] Finance Act 1976 (transfer to stock exchange nominee), or
(b)section 84(2) or (3) above,
shall be disregarded in construing section 87(4) and (5) above.
(2)Subsection (3) below applies where the chargeable securities mentioned in section 87(1) above are constituted by or transferable by means of an inland bearer instrument, within the meaning of the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891, which—
(a)is exempt from stamp duty under that heading by virtue of exemption 3 in that heading, or
(b)would be so exempt if it were otherwise chargeable under that heading.
(3)In such a case section 87 above shall have effect as if the following were omitted—
(a)in subsection (2) the words from "unless" to the end;
(b)subsections (4), (5) and (8).
(1)Section 87 above shall not apply as regards an agreement to transfer securities if the agreement is made by B in the ordinary course of his business as a market maker in securities of the kind concerned.
(2)Section 87 above shall not apply as regards an agreement to transfer securities to B or his nominee if—
(a)the agreement is made by B as principal in the ordinary course of his business as a broker and dealer in relation to securities of the kind concerned, and
(b)before the end of the period of 7 days beginning with the day on which the agreement is made or (in a case where the agreement is conditional) the day on which the condition is satisfied, B enters into an unconditional agreement to sell the securities to another person.
(3)For the purposes of this section, a person is a market maker in securities of a particular kind if he—
(a)holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities of that kind at a price specified by him, and
(b)is recognised as doing so by the Council of The Stock Exchange.
(4)For the purposes of this section, a person is a broker and dealer in relation to securities of a particular kind if he is a member of The Stock Exchange who carries on his business in the United Kingdom and is not a market maker in securities of that kind.
(5)The Treasury may by regulations provide that for subsection (3) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section.
(6)The Treasury may by regulations provide that for subsection (4) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a broker and dealer for the purposes of this section.
(7)For the purposes of subsection (2) above, if the securities which B sells cannot be identified (apart from this subsection) securities shall be taken as follows—
(a)securities of the same kind acquired in the period of 7 days ending with the day of the sale (and not taken for the purposes of a previous sale by B) shall be taken before securities of that kind acquired outside that period;
(b)securities of that kind acquired earlier in that period (and not taken for the purposes of a previous sale by B) shall be taken before securities of that kind acquired later in that period.
(8)For the purposes of subsection (7) above—
(a)securities are acquired when B enters into an agreement for them to be transferred to B or his nominee or (in a case where the agreement is conditional) when the condition is satisfied;
(b)B sells securities when he enters into an unconditional agreement to sell them to another person.
(9)The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
(1)Section 87 above shall not apply as regards an agreement to transfer a unit under a unit trust scheme to the managers under the scheme.
(2)Section 87 above shall not apply as regards an agreement to transfer a unit under a unit trust scheme if at the time the agreement is made—
(a)all the trustees under the scheme are resident outside the United Kingdom, and
(b)the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme.
(3)Section 87 above shall not apply as regards an agreement to transfer securities constituted by or transferable by means of—
(a)an overseas bearer instrument, within the meaning of the heading "Bearer Instrument" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891;
(b)an inland bearer instrument, within the meaning of that heading, which does not fall within exemption 3 in that heading (renounceable letter of allotment etc. where rights are renounceable not later than six months after issue).
(4)Section 87 above shall not apply as regards an agreement which forms part of an arrangement falling within section 93(1) or 96(1) below.
(5)Section 87 above shall not apply as regards an agreement to transfer securities which the Board are satisfied are held, when the agreement is made, by a person whose business is exclusively that of holding chargeable 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 chargeable 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).
(1)Where tax is charged under section 87 above as regards an agreement, B shall be liable for the tax.
(2)But where B is acting as nominee for another person, that other person shall be liable for the tax.
(1)If, as regards an agreement to transfer securities to B or his nominee, tax is charged under section 87 above and it is proved to the Board's satisfaction that at a time after the expiry of the period of two months (beginning with the relevant day, as defined in section 87(3)) but before the expiry of the period of six years (so beginning) the conditions mentioned in section 87(4) and (5) have been fulfilled, the following provisions of this section shall apply.
(2)If any of the tax charged has been paid, and a claim for repayment is made within the period of six years mentioned in subsection (1) above, the tax paid shall be repaid; and where the tax paid is not less than £25 it shall be repaid with interest on it at the appropriate rate from the time it was paid.
(3)To the extent that the tax charged has not been paid, the charge shall be cancelled by virtue of this subsection.
(4)In subsection (2) above "the appropriate rate" means 11 per cent, per annum or such other rate as the Treasury may from time to time specify by order.
(5)The power to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
(1)Subject to subsection (7) below and section 95 below, there shall be a charge to stamp duty reserve tax under this section where in pursuance of an arrangement—
(a)a person falling within subsection (2) below has issued or is to issue a depositary receipt for chargeable securities, and
(b)chargeable securities of the same kind and amount are transferred or issued to a person falling within subsection (3) below, or are appropriated by such a person towards the eventual satisfaction of the entitlement of the receipt's holder to receive chargeable securities.
(2)A person falls within this subsection if his business is or includes issuing depositary receipts for chargeable securities.
(3)A person falls within this subsection if his business is or includes holding chargeable securities as nominee or agent for the person who has issued or is to issue the depositary receipt.
(4)Subject to subsections (5) to (7) below, tax under this section shall be charged at the rate of £1.50 for every £100 or part of £100 of the following—
(a)in a case where the securities are issued, their price when issued;
(b)in a case where the securities are transferred for consideration in money or money's worth, the amount or value of the consideration;
(c)in any other case, the value of the securities.
(5)In a case where the securities are transferred and—
(a)the transfer is effected by an instrument on which stamp duty under the heading "Conveyance or Transfer of any kind not hereinbefore described" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 is chargeable,
(b)at the time of the transfer the transferor is a qualified dealer in securities of the kind concerned or a nominee of such a qualified dealer,
(c)the transfer is made for the purposes of the dealer's business,
(d)at the time of the transfer the dealer is not a market maker in securities of the kind concerned, and
(e)the instrument contains a statement that paragraphs (b) to (d) above are fulfilled,
subsection (4) above shall have effect as if "£1.50" read "50p" (in a case where the securities are transferred before the day of The Stock Exchange reforms) or "£1" (in any other case).
(6)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)subsection (4)(c) above applies in the case of the transfer to the other person,
(d)before the making of the transfer to the other person an instrument is received by a person falling within subsection (3) above,
(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 transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,
subsection (4)(c) 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.
(7)Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities, and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then—
(a)if the amount of the duty is less than the amount of tax found by virtue of subsections (4) to (6) above, the tax charged under this section shall be the amount so found less the amount of the duty;
(b)in any other case, there shall be no charge to tax under this section in respect of the transfer.
(8)Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (9) below) be the person who has issued or is to issue the depositary receipt.
(9)Where tax is charged under the preceding provisions of this section in a case where securities are transferred, and at the time of the transfer the person who has issued or is to issue the depositary receipt is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.
(10)Where chargeable securities are issued or transferred on sale under terms providing for payment in instalments and for an issue of other chargeable securities, and (apart from this subsection) tax would be charged under this section in respect of that issue, tax shall not be so charged but—
(a)if any of the instalments becomes payable by a person falling within subsection (2) or (3) above, there shall be a charge to stamp duty reserve tax under this section when the instalment becomes payable;
(b)the charge shall be at the rate of £1.50 for every £100 or part of £100 of the instalment payable;
(c)the person liable to pay the instalment shall be liable for the tax.
(11)Subject to subsection (12) below, this section applies where securities are transferred, issued or appropriated after 18th March 1986 (whenever the arrangement was made).
(12)This section does not apply, in the case of securities which are transferred, if the Board are satisfied that they were acquired or appropriated by the transferor on or before 18th March 1986 for or towards the eventual satisfaction of the entitlement of a person to receive securities of the same kind under a depositary receipt (whether issued on or before that date or to be issued after that date).
(1)For the purposes of section 93 above a depositary receipt for chargeable securities is an instrument acknowledging—
(a)that a person holds chargeable 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 chargeable 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 chargeable 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 section 93 above.
(3)For the purposes of section 93(4)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.
(4)For the purposes of section 93(4)(c) above the value of the securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred or appropriated (as the case may be).
(5)For the purposes of section 93(5) above a person is a qualified dealer in securities of a particular kind if he deals in securities of that kind and—
(a)is a member of a recognised stock exchange (within the meaning given by section 535 of the Taxes Act), or
(b)is designated a qualified dealer by order made by the Treasury.
(6)For the purposes of section 93(5) above a person is a market maker in securities of a particular kind if he—
(a)holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities of that kind at a price specified by him, and
(b)is recognised as doing so by the Council of The Stock Exchange.
(7)The Treasury may by regulations provide that for subsection (6) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of section 93(5) above.
(8)In section 93(5) above "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.
(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.
(1)Where securities are transferred—
(a)to a company which at the time of the transfer falls within subsection (6) of section 67 above and is resident in the United Kingdom, and
(b)from a company which at that time falls within that subsection and is so resident,
there shall be no charge to tax under section 93 above in respect of the transfer.
(2)There shall be no charge to tax under section 93 above in respect of a transfer, issue or appropriation of an inland bearer instrument, within the meaning of the heading "Bearer Instrument" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891, which does not fall within exemption 3 in that heading (renounceable letter of allotment etc. where rights are renounceable not later than six months after issue).
(3)There shall be no charge to tax under section 93 above in respect of an issue by a company (company X) of securities in exchange for shares in another company (company Y) where company X—
(a)has control of company Y, or
(b)will have such control in consequence of the exchange or of an offer as a result of which the exchange is made.
(4)For the purposes of subsection (3) above company X has control of company Y if company X has power to control company Y's affairs by virtue of holding shares in, or possessing voting power in relation to, company Y or any other body corporate.
(1)Subject to subsection (5) below and section 97 below, there shall be a charge to stamp duty reserve tax under this section where—
(a)a person (A) whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities has entered into an arrangement to provide such clearance services for another person, and
(b)in pursuance of the arrangement, chargeable securities are transferred or issued to A or to a person whose business is or includes holding chargeable securities as nominee for A.
(2)Subject to subsections (3) to (5) below, tax under this section shall be charged at the rate of £1.50 for every £100 or part of £100 of the following—
(a)in a case where the securities are issued, their price when issued;
(b)in a case where the securities are transferred for consideration in money or money's worth, the amount or value of the consideration;
(c)in any other case, the value of the securities.
(3)In a case where the securities are transferred and—
(a)the transfer is effected by an instrument on which stamp duty under the heading "Conveyance or Transfer of any kind not hereinbefore described" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891 is chargeable,
(b)at the time of the transfer the transferor is a qualified dealer in securities of the kind concerned or a nominee of such a qualified dealer,
(c)the transfer is made for the purposes of the dealer's business,
(d)at the time of the transfer the dealer is not a market maker in securities of the kind concerned, and
(e)the instrument contains a statement that paragraphs (b) to (d) above are fulfilled,
subsection (2) above shall have effect as if "£1.50" read "50p" (in a case where the securities are transferred before the day of The Stock Exchange reforms) or "£1" (in any other case).
(4)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)subsection (2)(c) above applies in the case of the transfer to the other person,
(d)before the making of the transfer to the other person an instrument is received by A or a person whose business is or includes holding chargeable securities as nominee for A,
(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 transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,
subsection (2)(c) 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.
(5)Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then—
(a)if the amount of the duty is less than the amount of tax found by virtue of subsections (2) to (4) above, the tax charged under this section shall be the amount so found less the amount of the duty;
(b)in any other case, there shall be no charge to tax under this section in respect of the transfer.
(6)Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (7) below) be A.
(7)Where tax is charged under the preceding provisions of this section in a case where securities are transferred to a person other than A, and at the time of the transfer A is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.
(8)Where chargeable securities are issued or transferred on sale under terms providing for payment in instalments and for an issue of other chargeable securities, and (apart from this subsection) tax would be charged under this section in respect of that issue, tax shall not be so charged but—
(a)if any of the instalments becomes payable by A or by a person whose business is or includes holding chargeable securities as nominee for A, there shall be a charge to stamp duty reserve tax under this section when the instalment becomes payable;
(b)the charge shall be at the rate of £1.50 for every £100 or part of £100 of the instalment payable;
(c)the person liable to pay the instalment shall be liable for the tax.
(9)For the purposes of subsection (2)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.
(10)For the purposes of subsection (2)(c) above the value of securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred.
(11)For the purposes of subsection (3) above "qualified dealer" and "market maker" have at any particular time the same meanings as they have at that time for the purposes of section 93(5) above.
(12)In subsection (3) above "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.
(13)Subject to subsection (14) below, this section applies where securities are transferred or issued after 18th March 1986 (whenever the arrangement was made).
(14)This section does not apply, in the case of securities which are transferred, if the Board are satisfied—
(a)that on or before 18th March 1986 the transferor (or, where the transferor transfers as agent, the principal) agreed to sell securities of the same kind and amount to the person (other than A) referred to in subsection (1)(a) above, and
(b)that the transfer is effected in pursuance of that agreement.
(1)Where securities are transferred—
(a)to a company which at the time of the transfer falls within subsection (6) of section 70 above and is resident in the United Kingdom, and
(b)from a company which at that time falls within that subsection and is so resident,
there shall be no charge to tax under section 96 above in respect of the transfer.
(2)There shall be no charge to tax under section 96 above in respect of a transfer effected by an instrument on which stamp duty is not chargeable by virtue of—
(a)section 127(1) of the [1976 c. 40.] Finance Act 1976 (transfer to stock exchange nominee), or
(b)section 84(2) or (3) above.
(3)There shall be no charge to tax under section 96 above in respect of a transfer or issue of an inland bearer instrument, within the meaning of the heading "Bearer Instrument" in Schedule 1 to the [1891 c. 39.] Stamp Act 1891, which does not fall within exemption 3 in that heading (renounceable letter of allotment etc. where rights are renounceable not later than six months after issue).
(4)There shall be no charge to tax under section 96 above in respect of an issue by a company (company X) of securities in exchange for shares in another company (company Y) where company X—
(a)has control of company Y, or
(b)will have such control in consequence of the exchange or of an offer as a result of which the exchange is made.
(5)For the purposes of subsection (4) above company X has control of company Y if company X has power to control company Y's affairs by virtue of holding shares in, or possessing voting power in relation to, company Y or any other body corporate.
(1)The Treasury may make regulations—
(a)providing that provisions of the [1970 c. 9.] Taxes Management Act 1970 specified in the regulations shall apply in relation to stamp duty reserve tax as they apply in relation to a tax within the meaning of that Act, with such modifications (specified in the regulations) as they think fit;
(b)making with regard to stamp duty reserve tax such further provision as they think fit in relation to administration, assessment, collection and recovery.
(2)The power to make regulations under subsection (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
(1)This section applies for the purposes of this Part of this Act.
(2)"The Board" means the Commissioners of Inland Revenue.
(3)Subject to the following provisions of this section, "chargeable securities" means stocks, shares, loan capital and units under a unit trust scheme.
(4)"Chargeable securities" does not include stocks, shares or loan capital which is (or are) issued or raised by a body corporate not incorporated in the United Kingdom unless the stocks, shares or loan capital is (or are) registered in a register kept in the United Kingdom by or on behalf of the body corporate.
(5)"Chargeable securities" does not include stocks, shares or loan capital the transfer of which is exempt from all stamp duties.
(6)A reference to stocks, shares or loan capital includes a reference to—
(a)an interest in, or in dividends or other rights arising out of, stocks, shares or loan capital the transfer of which is not exempt from all stamp duties;
(b)a right to an allotment of or to subscribe for, or an option to acquire, stocks, shares or loan capital the transfer of which is not exempt from all stamp duties,
except that the reference does not include a reference to an interest in a depositary receipt for stocks or shares.
(7)A depositary receipt for stocks or shares is an instrument acknowledging—
(a)that a person holds stocks or shares 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 stocks or shares of the same kind, including the right to receive such stocks or shares (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,
except that a depositary receipt for stocks or shares does not include an instrument acknowledging rights in or in relation to stocks or shares 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.
(8)The Treasury may by regulations provide that for subsection (7) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt; and the power to make regulations under this subsection shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
(9)"Unit" and "unit trust scheme" have the same meanings as in Part VII of the [1946 c. 64.] Finance Act 1946.
(10)In interpreting "chargeable securities" in sections 93, 94 and 96 above—
(a)the words in subsection (4) above from "unless" to the end shall be ignored, and
(b)the effect of paragraph 8 of Schedule 14 to the [1985 c. 6.] Companies Act 1985 (share registered overseas) and of section 118 of the [1960 c. 22 (N.I.).] Companies Act (Northern Ireland) 1960 and paragraph 7 of Schedule 14 to the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986 (equivalent provision for Northern Ireland) shall be ignored for the purposes of subsection (5) above.