PART IIISTAMP DUTY
Loan capital, letters of allotment etc.
C3C4C5C6C1C2F180C Repurchases and stock lending.
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 F11 (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.
F22A
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 F4in this subsection are—
a
that the arrangement is effected on F5a regulated market, a multilateral trading facility or a recognised foreign exchange; and
b
that stock of the kind concerned is regularly traded on that F6market, 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 M1Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.
6
An arrangement is effected on F7a 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 F8the market, facility or exchange; and
7
F37A
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.