Covid Brings the Demise of the Duty Stamp
For hundreds of years, the payment of Stamp Duty on the transfer of shares has been denoted by red stamps embossed on the share transfer form. But this is coming to an end – and it is the pandemic that has brought the change.
In March 2020, at the start of the first lockdown, the Stamp Duty Offices of HMRC changed their processes for the stamping of share transfers – at that time just as a temporary measure. No longer was the original share transfer form to be sent to them – they did not want to be receiving paper and their staff were working from home – but instead a scanned copy was to be emailed to them. The duty was to be paid by bank transfer and instead of the official red stamps embossed on the share transfer form, an email was sent confirming that the Stamp Duty had been paid.
With effect from 19 July 2021, this temporary process is being made permanent. The confirmation of payment will be sent by letter rather than email, but otherwise the process remains the same.
Those who deal with the transfer of shares and in particular the people who maintain the statutory registers for companies will need to make sure they safely retain both the original share transfer forms and the letters confirming that the Stamp Duty has been properly paid.
This may be seen as progress and modernisation. But there was always something satisfying about receiving back the original share transfer form with one or more official red stamps embossed on it confirming that the Stamp Duty had been paid. After all, there is no other benefit to the payer of this outdated tax on documents; it is, however, a lucrative source of revenue for the government.
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