12/07/2017
Taxpayers’ frustrations with the outdated and cumbersome ‘paper approach’ that is still used to administer stamp duty on certificated share transactions are comprehensively addressed by Office of Tax Simplification recommendations to digitise the process.
While Stamp Duty Land Tax on land transactions and Stamp Duty Reserve Tax on most share trading have been digitised for some years under the CREST settlement system, stamp duty charged on certificated share transactions falls outside CREST and is still administered by impressing paper stock transfer forms with physical stamps.
Apart from being anachronistic, stamping paper documents can cause particular problems when there is a commercial requirement to register a transaction on the same day it takes place.
‘Stamp duty on paper documents: a way forward to reform, digitise and simplify’ sets out core recommendations, which digitise the tax and facilitate same day registration. They include
- replacing the process that requires sending a paper document to the Birmingham Stamp Office to be stamped, with a digital process
- updating the rules governing company registrars so that they are able to register transactions on the same day as and when required
- limiting the scope of stamp duty to the transactions it applies to in practice
Further recommendations to simplify it immediately or as part of a future road map of change include
- addressing the present archaic way in which stamp duty is calculated in relation to consideration that is difficult to value at the time of the transaction concerned
- bringing stamp duty legislation within the umbrella of the already digitised Stamp Duty Reserve Tax and repealing the present legislation, which is spread across many Acts of Parliament
- ensuring the digital process is developed to secure the fullest benefits for both those who pay the tax and those who collect it