On 10 July 2017, the Office of Tax Simplification (OTS) published its report on the modernisation of stamp duty. The core recommendations in the report are:
• replacing the process that requires sending a paper document to the Birmingham Stamp Office to be stamped, with a digital process (ie no more physical stamping)
• updating the rules governing company registrars’ so that they are able to register transactions on the same day as and when required (ie removing the need to wait for a stamped stock transfer form to be returned by HMRC)
• limiting the scope of stamp duty to the transactions it applies to in practice (ie limiting stamp duty to transfers of UK shares only)
The report notes the practical frustrations caused by the fact that only in limited cases (less than 50 a year) can “same day” stamping be obtained, and that (currently) “time-consuming workarounds” are used by lawyers to deal with timing issues caused by the physical stamping process.
The report also makes a number of further, more technical recommendations, such as increasing the current £1,000 threshold for stamp duty and simplifying the stamp duty ‘debt as consideration’ rules.
It is not clear when reform of the stamp duty rules will take effect (or, indeed, if all of the recommendations will be followed).
It does however seem likely that the days of physical stamping are numbered. In a further development, on 14 August 2017 the Chancellor wrote to the OTS in response to its July report. The letter confirms the Chancellor’s broad agreement with the “direction of travel” of the report’s core recommendations, but does not commit to a timetable.
The report can be viewed here.
The Chancellor’s letter can be viewed here.