Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Taxes applicable to a given situation or course of action and their impact

Hamid will sell shares worth £60,000 to a buyer for cash. Compared with Hamid gifting those shares to his son, which statement about stamp duty is correct under the ATX-UK tax tables where stamp duty on shares is 0.5%?

The purchaser pays stamp duty at 0.5% of the consideration, so £300 on a £60,000 share sale. A gift with no consideration attracts no stamp duty, which makes gifting cheaper on this tax alone, though it may trigger other taxes.

  1. AThe buyer pays stamp duty of £300 on the sale, whereas a gift for no consideration attracts noneCorrect
  2. BThe seller pays stamp duty of £300 on the sale, whereas a gift attracts none
  3. CThe buyer pays stamp duty of £300 on both the sale and the gift
  4. DNeither the sale nor the gift attracts stamp duty

Explanation

Stamp duty at 0.5% on £60,000 consideration is £300 and is paid by the buyer. A gift involves no consideration, so no stamp duty arises. The seller option is wrong because the purchaser bears the charge.

Did you get it right without looking?

One question tells you little. A timed set on Taxes applicable to a given situation or course of action and their impact shows your real accuracy, how long you take and where you lose marks.

Practise Taxes applicable to a given situation or course of action and their impactFree diagnostic mock

More Taxes applicable to a given situation or course of action and their impact questions