ACCA Strategic Professional · Advanced Taxation (UK) · Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)
Hamid buys shares in an unquoted trading company, Brightway Ltd, for £84,260 by a stock transfer form. Stamp duty on shares is 0.5%, and it is normally rounded up to the nearest £5. What is the stamp duty payable?
The stamp duty is £425. Half a per cent of £84,260 is £421.30, and stamp duty on share transfers is rounded up to the nearest £5, so the buyer pays £425 rather than a rounded-down or unrounded figure.
- A£420
- B£425Correct
- C£421
- D£430
Explanation
0.5% x £84,260 = £421.30. Stamp duty is rounded up to the next £5, giving £425. Paying £420 rounds down, and £421 is not rounded at all.
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