Stamp Duty frequently asked questions
Stamp duty applies to a conveyance, transfer or lease of land where the instrument was executed prior to 1 December 2003. For instruments executed on or after 1 December 2003, stamp duty applies only to transfers of stock and marketable securities, and to certain transfers of interest in partnerships.
If you are in any doubt as to whether stamp duty applies to a particular transaction please, contact the Stamp Office Helpline.
Land transactions which become effective on or after December 2003 are subject to stamp duty land tax (SDLT). The SDLT manual is available for further information.
About Shares
- When someone dies and their shares are transferred to me, what exemption category will apply?
- I want to give someone my shares, what do I do?
- Where do I get a stock transfer form?
- What do I do with the stock transfer form once it has been completed?
- When must the Duty be paid?
About Leases
- Why do I need to get my lease stamped?
- I heard that tenancy agreements below a certain amount do not need to be stamped is this correct?
- How much will the monthly rent have to be on my tenancy agreement before I start paying duty.
- I have the copy document signed by the tenant only - how much do I have to pay?
About Adjudication
About Shares
Q. When someone dies and their shares are transferred to me, what exemption category will apply?
A. This depends on whether or not the deceased left a will. If there is a will and you are specifically mentioned as the person who has been left the shares, then category B will apply.
If the will does not mention the shares but entitles you to a part of the estate, then category E will apply.
In the absence of a will category C is appropriate.
Q. I want to give someone my shares, what do I do?
A. You need to get a stock transfer form and fill in your name as "transferor" and their name as "transferee". You should put "gift" or "nil" in the box, which asks how much consideration, was paid.
You will then need to complete the back of the form showing that it is exempt under category L.
Q. Where do I get a stock transfer form?
A. These are available from your bank or building society or a legal stationers. There will be a small charge.
Q. What do I do with the stock transfer form once it has been completed?
A. You should send it, together with the share certificate to the Registrar of the company in which the shares are held you will find their address on the share certificate.
The Stock Transfer must be sent to Birmingham Stamp Office within 30 days of the date on which it becomes effective. This is normally the date on the document. A penalty is payable if the document is sent after this 30 day period. Interest will also be charged on any duty which is not paid within the 30 day time-limit.
About Leases
Q. Why do I need to get my lease stamped?
A. Having a document stamped protects your rights to the property. You can not present a document in court if it has not been stamped. You may also need to register it with the Land Registry and they will only accept stamped documents
Q. I heard that tenancy agreements below a certain amount do not need to be stamped is this correct?
A. Yes. For agreements of 7 years or less, if the annual rent (or average annual rent) is £5000 or under you do not need to pay any duty. This also applies where the term is less than 1 year and the rent for that period is £5000 or below.
Q. How much will the monthly rent have to be on my tenancy agreement before I start paying duty.
A. This depends on how long the term is. If it is a year, then the monthly rent should be £416.67 or more, if it is for 6 months the rent must be £833.34 per month or more before you start paying duty.
Q. I have the copy document signed by the tenant only - how much do I have to pay?
A. This will be £5 fixed duty, unless the original document is not chargeable with any duty, then it will be nothing.
About adjudication
What is an adjudication and where do I obtain it?
In simple terms, adjudication is where the Stamp Office gives its formal opinion as to the amount of stamp duty due. It is an important step in taking forward an appeal against a stamp duty liability.
Stamp duty appeals are heard before the High Court in England, Wales and Northern Ireland and before the Court of Session in Scotland.
Adjudication is compulsory in certain situations not involving appeals. For example, you will need documents to be adjudicated when claiming relief:
- for transactions between related companies (Section 42 FA 1930)
- in connection with acquisitions of companies and undertakings (Section 75 and 77 FA 1986)
- for conveyances, transfers and leases to charities (Section129 FA 1982).
The adjudication service is available and a special stamp is impressed on the relevant document.
