Last week, HMRC published new arrangements for the payment of stamp duty on share transfers during the Covid-19 crisis. These arrangements cover not just the simple cases of the payment of duty on sales of shares in private companies for cash consideration, but also cases where consideration has to be valued or a relief from duty is being claimed.
In summary, for the duration of the crisis, HMRC will no longer apply a physical orange stamp to stock transfer forms. Instead, taxpayers are asked to send copies of documents which would otherwise require stamping to HMRC by email and make payments electronically. HMRC will then, by email, confirm receipt of any duty and provide an assurance that the company's registrar may register the transfer even though the registrar will not be in possession of a stamped stock transfer form (as legislation currently requires).
The changes are a useful sticking plaster, but perhaps now is the time to abolish stamp duty and retire the stamping machines once and for all. Stamp duty always seemed a pretty archaic tax when I was a trainee - articled clerk in those days - although I have to admit it was a good excuse for a walk out of the office to Bush House when the weather was fine. It is even more so now. The same amount of tax could be collected through the application of Stamp Duty Reserve Tax (SDRT) to private company share transfers by removing the cancellation mechanism and translating the stamp duty reliefs into the SDRT code. The tax could be paid by return in much the same ways as for Stamp Duty Land Tax and a receipt given for the duty which would allow a registrar to write up the company's books. No more sitting and waiting for HMRC to return the transfers before you can complete the next stage of your group reorganization, creating documents whose only purpose is to have them stamped so you can write-up the books, desperate pleading for a same day stamping appointment or explaining to incredulous overseas advisers why you have to do so. Happiness all round.