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Finance Act 1999

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This is the original version (as it was originally enacted).

Part ICharging provisions

Charge on issue of instrument

1(1)Stamp duty is chargeable—

(a)on the issue of a bearer instrument in the United Kingdom, and

(b)on the issue of a bearer instrument outside the United Kingdom by or on behalf of a UK company.

(2)This is subject to the exemptions in Part II of this Schedule.

Charge on transfer of stock by means of instrument

2Stamp duty is chargeable on the transfer in the United Kingdom of the stock constituted by or transferable by means of a bearer instrument if duty was not chargeable under paragraph 1 on the issue of the instrument and—

(a)duty would be chargeable under Part I of Schedule 13 (conveyance or transfer on sale) if the transfer were effected by an instrument other than a bearer instrument, or

(b)the stock constituted by or transferable by means of a bearer instrument consists of units under a unit trust scheme.

Meaning of “bearer instrument”

3In this Schedule “bearer instrument” means—

(a)a marketable security transferable by delivery;

(b)a share warrant or stock certificate to bearer or instrument to bearer (by whatever name called) having the like effect as such a warrant or certificate;

(c)a deposit certificate to bearer;

(d)any other instrument to bearer by means of which stock can be transferred; or

(e)an instrument issued by a non-UK company that is a bearer instrument by usage.

Rates of duty

4The duty chargeable under this Schedule is 1.5 of the market value of the stock constituted by or transferable by means of the instrument, unless paragraph 5 or 6 applies.

5In the case of—

(a)a deposit certificate in respect of stock of a single non-UK company, or

(b)an instrument issued by a non-UK company that is a bearer instrument by usage (and is not otherwise within the definition of “bearer instrument” in paragraph 3),

the duty is 0.2 of the market value of the stock constituted by or transferable by means of the instrument.

6In the case of an instrument given in substitution for a like instrument stamped ad valorem (whether under this Schedule or not) the duty is £5.

Ascertainment of market value

7(1)For the purposes of duty under paragraph 1 (charge on issue of instrument) the market value of the stock constituted by or transferable by means of the instrument is ascertained as follows.

(2)If the stock was offered for public subscription (whether in registered or in bearer form) within twelve months before the issue of the instrument, the market value shall be taken to be the amount subscribed for the stock.

(3)In any other case the market value shall be taken to be—

(a)the value of the stock on the first day within one month after the issue of the instrument on which stock of that description is dealt in on a stock exchange in the United Kingdom, or

(b)if stock of that description is not so dealt in, the value of the stock immediately after the issue of the instrument.

8(1)For the purposes of duty under paragraph 2 (charge on transfer of stock by means of instrument) the market value of the stock constituted by or transferable by means of the instrument is ascertained as follows.

(2)In the case of a transfer pursuant to a contract of sale, the market value shall be taken to be the value of the stock on the date when the contract is made.

(3)In any other case, the market value shall be taken to be the value of the stock on the day preceding that on which the instrument is presented to the Commissioners for stamping, or, if it is not so presented, on the date of the transfer.

Meaning of “deposit certificate”

9In this Schedule a “deposit certificate” means an instrument acknowledging the deposit of stock and entitling the bearer to rights (whether expressed as units or otherwise) in or in relation to the stock deposited or equivalent stock.

Bearer instruments by usage

10(1)In this Schedule a “bearer instrument by usage” means an instrument —

(a)which is used for the purpose of transferring the right to stock, and

(b)delivery of which is treated by usage as sufficient for the purposes of a sale on the market, whether that delivery constitutes a legal transfer or not.

(2)A bearer instrument by usage is treated—

(a)as transferring the stock on delivery of the instrument, and

(b)as issued by the person by whom or on whose behalf it was first issued, whether or not it was then capable of being used for transferring the right to the stock without execution by the holder.

Meaning of “company”, “UK company” and “non-UK company”

11In this Schedule—

  • “company” includes any body of persons, corporate or unincorporate;

  • “UK company” means a company that is formed or established in the United Kingdom; and

  • “non-UK company” means a company that is not a UK company.

Meaning of “stock” and “transfer”

12(1)In this Schedule “stock” includes securities.

(2)References in this Schedule to stock include any interest in, or in any fraction of, stock or in any dividends or other rights arising out of stock and any right to an allotment of or to subscribe for stock.

(3)In this Schedule “transfer” includes negotiation, and “transferable”, “transferred” and “transferring” shall be construed accordingly.

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