H.M. TREASURY

EXPLANATORY NOTE

CLAUSE 116 AND SCHEDULE 33: STAMP DUTY POWER TO VARY STAMP DUTIES

SUMMARY

This Clause and Schedule provide a power to allow stamp duty avoidance devices to be countered as they arise. Under the power, regulations may be made to vary any existing stamp duty with immediate effect, subject to approval by a House of Commons vote. The power cannot be used to vary rates or thresholds and can only be used for cases involving land, stock or marketable securities. And any regulations will be temporary, as they will not stand unless included within a subsequent Finance Bill.

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DETAILS OF THE CLAUSE

The Clause gives effect to Schedule 33.

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DETAILS OF THE SCHEDULE

Paragraph 1 provides a power for regulations to be made to vary any existing stamp duty.

Paragraph 2 limits the use of the power to instruments which relate to transactions involving land, stock or marketable securities.

Paragraph 3 prevents the power being used to vary rates or thresholds.

Paragraph 4 applies an affirmative resolution procedure. Regulations made under this power cease to have effect if the House of Commons does not approve them within 28 days or rejects them within that period.

Paragraph 5 provides for repayment of any additional duty if the regulations are not approved, and specifies a claims procedure comparable with that applying to other claims for stamp duty repayments.

Paragraph 6 provides that, if the regulations are not approved, instruments executed while the regulations were in force will be duly stamped whether stamped in accordance with the regulations or in accordance with what the law would have been apart from the regulations.

Paragraph 7 provides that the regulations will be temporary.

Paragraph 8 provides a power to make transitional, supplementary and incidental provisions.

Paragraph 9 concerns interpretation.

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BACKGROUND

This provision provides a mechanism for stamp duty avoidance devices to be countered as they arise and with immediate effect, as is already the case for other taxes including stamp duty reserve tax. Under the existing legislation, in Section 50 of the Finance Act 1973, stamp duty changes can only be made with immediate effect at the time of a Budget.

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