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

Orla gives 10,000 shares in a UK company to her adult son for no consideration by a stock transfer form. Which statement is correct about stamp duty on this gift?

No stamp duty is payable on the gift. Stamp duty on shares is 0.5% of the consideration given, and a gift has none, so there is no charge. Market value applies for capital gains tax on gifts but is not the stamp duty base.

  1. AStamp duty is charged at 0.5% of the market value of the shares
  2. BStamp duty is charged at 0.5% of the donor's original cost
  3. CNo stamp duty is payable because stamp duty is charged on the consideration given and there is noneCorrect
  4. DStamp duty is payable by the donor at 0.5% of the capital gain

Explanation

Stamp duty on shares is charged at 0.5% of the consideration paid. A gift has no consideration, so no stamp duty arises. Market value is a capital gains tax concept for gifts, not the base for stamp duty, so the market value option is wrong.

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