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

Which statement about stamp duty on shares is correct, using the 0.5% rate in the ATX-UK tax tables?

Stamp duty on shares is 0.5% of the consideration paid and falls on the buyer. It is not based on nominal value or market value, and a gift with no consideration does not attract it.

  1. AIt is charged on the buyer on the consideration paid for shares transferred by stock transfer formCorrect
  2. BIt is charged on the seller on the market value of shares transferred
  3. CIt is charged on gifts of shares at 0.5% of market value
  4. DIt is charged at 0.5% on the nominal value of the shares

Explanation

Stamp duty at 0.5% is charged on the consideration paid for shares and the buyer pays it. It is not on the seller and not on nominal value. A gift has no consideration, so no stamp duty arises on a pure gift.

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