Modernisation of the stamp taxes on shares framework call for evidence - Law Society response
We responded to an HM Revenue & Customs (HMRC) call for evidence about the principles and design of a new framework for stamp duty and stamp duty reserve tax (SDRT).
The call for evidence invites views on a new framework for taxes on transactions in shares and securities to inform modernisation of the existing regimes.
The transaction tax regime on shares and securities should be clear, simple and practicable, so that it can be applied with confidence to the full range of typical transactions. To help achieve that goal, our response explains areas of the existing stamp duty and SDRT regimes that work well and others where improvements could be made.
Specific areas that would benefit from modernisation include:
- the stamp duty rules on deferred, uncertain and contingent consideration
- the process for reclaiming tax where both SDRT and stamp duty are charged
- the gateway provisions for types of transactions in scope
- the rules on transfers of partnership interests
A formalisation of the current temporary processes in place to deal with the closure of the stamp presses during the pandemic would also be beneficial in addressing the backlog of unstamped documents.
What this means for solicitors
Solicitors have deep experience and involvement in dealing with stamp duty and SDRT in practice contexts that range from transactions involving privately held companies through high volume transactions in the listed markets to low volume but high value merger and acquisition transactions.
The responses to the call for evidence will inform the government’s thinking on possible changes to the stamp duty and SDRT frameworks. If the government decides to take forward any potential changes, it is expected that a further consultation on these changes would be undertaken.