COVID-19: Changes to Stamp Duty on Shares
In response to the ongoing Covid-19 pandemic, Her Majesty’s Revenue and Customs (HMRC) has introduced emergency measures to help streamline the stamp duty process during this challenging time.
The emergency measures apply to stamp duty, which is due on the paper transfer of shares or securities. The measures do not apply to Stamp Duty Land Tax, which is relevant when a property is bought or transferred, nor do the measures apply to Stamp Duty Reserve Tax, which is paid on the paperless purchase of shares, as these processes were digitalised some time ago.
Until further notice, HMRC will only process stamp duty related applications and correspondence, including the stamping of stock transfer forms and other documents of transfer, electronically, using the following email address: stampdutymailbox@hmrc.gov.uk. This means that HMRC will accept e-signatures whilst emergency measures are in place. HMRC will not process stamp duty related applications received by post during this emergency period.
In addition, all payments must be submitted to HMRC electronically, using Faster Payments, BACS or CHAPS.
What if I have sent documents to HMRC by post already?
If you have already posted your documents, HMRC advise that you should resubmit your documents electronically and include the details of any payments you have made in respect of your submission. Documents received by post will not be reviewed by HMRC until the emergency measures end.
How will HMRC confirm receipt of my submission?
Once the correct stamp duty has been paid, HMRC will send an email to the taxpayer, attaching a letter which will:
- confirm receipt of the stamp duty payment
- give details of the transactions and the reference codes
- provide assurance that HMRC will not seek to impose a penalty against the Registrar for registering the new ownership of the shares. Such assurance is necessary, as it would normally be an offence under the Stamp Act 1891, to register a document of transfer that had not been physically stamped by HMRC.
Any queries regarding the stamp duty process, should be submitted to HMRC using the above email address. Full guidance can be found on the government website, using the following links:
https://www.gov.uk/guidance/pay-stamp-duty
https://www.gov.uk/guidance/stamp-duty-on-shares
What happens when the emergency measures end?
It is unclear at this stage, whether stamp duty related applications and correspondence submitted to HMRC during this emergency period, will need to be resubmitted by post after the government’s emergency measures end. We expect HMRC to provide further guidance in due course.
The recent pandemic has highlighted the inefficiencies of the current procedures in place for what is one of the UK’s oldest taxes. Stamp duty was first introduced in 1694.
With the possibility of further social distancing procedures being implemented in the future, the government may have no choice other than to adopt a more technologically advanced approach, when processing the stamp duty due on the paper transfer of shares or securities.
How can Patron Law help you and your business?
For further information, please contact lawyer, Shennell Richards, on 0203 841 7473 or email shennell@patronlaw.co.uk.
This article is for general information only and does not constitute legal or professional advice.
