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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: gains and losses on the disposal of shares and securities

Ravi buys 20,000 quoted shares in a UK company for £5.00 each on the stock exchange, with the consideration being £100,000. Stamp duty on shares applies at the rate shown in the ACCA tax tables. What stamp duty is payable on this purchase?

The stamp duty is £500. Stamp duty on a purchase of shares is charged at 0.5% of the consideration paid, and 0.5% of £100,000 gives £500. It is paid by the buyer, not the seller.

  1. A£500Correct
  2. B£1,000
  3. C£5,000
  4. D£2,000

Explanation

Stamp duty on shares is charged at 0.5% of the consideration. 0.5% x £100,000 = £500. The £1,000 option wrongly uses 1%, and £5,000 uses 5%, both being the wrong rate.

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