The OTS has published a report on the reform of stamp duty on shares, including simplification and digitisation in order to address the main practical frustrations which taxpayer experience in the current regime.
The core recommendations of the report are:
- making stamp duty a self-assessable tax rather than its current "voluntary" status.
- aligning the scope of stamp duty with SDRT (for example, by excluding non-UK shares, introducing stamp duty reliefs into the SDRT rules and calculating it by reference to money or money's worth consideration).
- digitising the stamp duty process and providing taxpayers with a unique transaction reference confirming that the transaction has been notified to HMRC (and retiring the current stamping machines).
- amending company law rules to allow company registrars to write up a company's books on receipt of the transaction reference.
The main open point of interest to the private funds industry is the recommendation that consideration is given to how stamp duty should be charged on transfers of partnership interests. Currently stamp duty generally is not paid on such transfers, but a level of stamp duty might become payable if it is charged by reference to the SDRT that would be payable on a direct transfer of the shares and securities held by the partnership. This point is open to discussion.