The Stamp Office: Stamp Office Customer Newsletter - 15 May 2001

The Finance Act together with regulations published on 14 March contain the new SDRT exemption for units in unit trusts and shares in oeics held within IPAs. The exemption came into effect from 6th April 2001. A Budget Press Release dated 7th March 2001 (REV BN8) explains the three methods (a, b or c) Investment Fund Managers have in order to operate the new exemption.

Investment Fund Managers wishing to undertake this type of business and claim the new exemption will need to ensure their systems enable them to identify units held within IPAs and provide the Stamp Office SDRT Operations Unit with relevant details.

Method (a) applies if a unit trust instrument requires that all units be held in IPAs, (or in the case of an oeic the instrument of incorporation requires that all the shares must be held within IPAs). In such a unit trust or oeic all transfers of units or shares will be exempt and no monthly return to the SDRT Operations Unit will be necessary.

Method (b) applies to oeics that have one or more share classes that the company's instrument of incorporation restricts to holding in IPAs, and the oeic also has at least one other class of shares which is not restricted in this way. Surrenders of shares in IPA share classes are exempt from SDRT and are left out of account for the purpose of calculating tax payable under Schedule 19 Finance Act 1999.

We suggest that an additional " exempt " category be added to the monthly SDRT Return in which you state the number of shares in the IPA class (or classes) that have been surrendered. No return will be necessary where there is no charge to SDRT for a particular month (for example, if all surrenders were of shares in the IPA classes).

Method (c) is only available to a unit trust that has in place systems that enable the person making the return to provide a certificate in or with the return in the following terms:-

(a) that at all times in the period to which the Return relates, the trustees or managers were able to identify which of the units under the scheme were held within individual pension accounts, and

(b) that at no time in that period have the trustees or managers imposed any charge on, or recovered any amount from, an IPA unit holder which included an amount directly or indirectly attributable to tax payable by the trustees under Part II of Schedule 19 FA 1999.

In a qualifying unit trust, surrenders of units held in IPAs are exempt from SDRT and are left out of account for the purpose of calculating tax payable under Schedule 19 Finance Act 1999.

If exemption is claimed, we suggest that an additional " exempt " category be added to the monthly SDRT return in which you state the number of exempt units that have been surrendered. No return will be necessary where there is no charge to SDRT for a particular month (for example, if all surrenders were of units held within IPAs).

Any enquiries relating to the above can be made to SDRT Operations staff, David Why 01903 509752 or Ian Timms 01903 508793.

Please note:
All enquiries regarding this Newsletter should now be sent to:

Birmingham Stamp Office
SDRT Team
9th Floor, City Centre House
30 Union Street
Birmingham
B2 4AR

Tel: 0845 603 0135
Fax: 0121 633 3921