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ACCA Strategic Professional · Advanced Taxation (UK) · Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Bolt Ltd agrees on 10 March to buy 20,000 shares in a UK company for £60,000. Completion happens by a signed stock transfer form dated 25 March, which Bolt Ltd sends for stamping on 3 April. Assume the 0.5% rate. Which statement is correct?

SDRT of £300 arises on the agreement but is cancelled or repaid once stamp duty of £300 is paid on the transfer instrument, so the total cost is £300, not £600. The same transaction is not taxed twice.

  1. ASDRT of £300 arises on the agreement and is cancelled or repaid if stamp duty of £300 is paid on the transfer instrumentCorrect
  2. BBoth SDRT of £300 and stamp duty of £300 remain payable, giving £600 in total
  3. CNo SDRT arises because a written instrument exists, so only stamp duty of £300 is paid
  4. DSDRT of £300 is payable by the seller and stamp duty by the buyer

Explanation

SDRT arises on the agreement at 0.5% of £60,000, which is £300. Where a transfer instrument is stamped and the duty paid within the time limit, the SDRT charge is cancelled or repaid, so only £300 is borne overall. Paying both would be double taxation.

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