Stamp Duties Amendment Act 1964

This commentary item was published in Public Information Bulletin Volume 16, December 1964.

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This Act was passed on 18 November 1964. It effects two amendments to the present stamp duty laws. The first gives a concession on me first purchase of an "own your own" flat in circumstances where the purchaser acquires an undivided interest in the land on which the flats are built. Details of this concession were printed in Public Information Bulletin Number 7 and to help the public are reprinted in this issue. The second amendment enables sharebrokers to stamp certain transfers of shares with adhesive stamps and it is hoped that this will assist them when dealing with transfers of small lots.

Stamp duty on purchases of "Own your own" flats

The concession extends that provided by Section 77A of the Stamp Duties Act 1954 for purchases of newly erected dwelling-houses and will operate in similar manner.

Points to be noted are -

Scope of the concession

The concession applies where an undivided share of land is transferred for valuable consideration and is accompanied by an agreement which gives the purchaser a right of exclusive use and occupation of one of the flats erected or to be erected on the land.

Definition of "Flat" for purposes of concession

For this purpose a flat is taken to mean a separate residence in a building or buildings erected or to be erected on the land solely as separate residences for each of more than one family. The building or buildings may include the usual appurtenances such as wash-houses or garages but must not include other large improvements such as shops or offices.

Purchaser must have first use of flat
The flat must not have been lived in prior to the sale.

Only one concession can be allowed
The concession cannot be granted more than once in respect of any particular flat.

Date from which concession operates
The concession will be given only if the date of the sale was on or after 1 December 1963. For this purpose the date of sale is taken as the date the instrument or earliest instrument of agreement of sale was executed or where there is no such instrument, the date of the instrument of transfer.

Evidence required in support of application
When a concession is sought the purchaser will be asked to give the Department a statutory declaration setting out -

• That under an agreement of sale (or Memorandum of Transfer as the case may be) which is dated ... he purchased from ... (vendor's name) an undivided share in the land described as ... (description in agreement or Transfer)
• That the building erected on the land is for separate residences only and that the only other improvements effected on the said land are .... (state briefly).
• That by virtue of the purchase he acquires the right of exclusive use and occupation of a separate residence in the said building being ... (specify).
• That such separate residence has not at any time prior to the sale been resided in by any person.
• That the unimproved value of the land as shown on the district valuation roll, a copy of which is annexed is £ ... .

Stamping of transfers of small lots of shares by sharebrokers

Section 3 of the Amendment Act provides -

• "The principal Act is hereby amended by inserting, after section 66, the following section:
  
  • "66A Where shares are purchased through the agency of a sharebroker for full consideration of a value not exceeding twenty pounds, the instrument of transfer of those shares may either be presented for stamping by the Inland Revenue Department in accordance with Part II of this Act or be stamped with an adhesive stamp to be cancelled by that sharebroker or any of his employees within three months after and exclusive of the date of its execution."

Points to watch

Points to be particularly noted are -

• The shares are to have been purchased through the agency of a sharebroker.
• The price is to be the full value of the shares and is not to exceed £20.
• The stamp is to be affixed within three months after the share transfer has been executed.
• The stamp is to be cancelled by the sharebroker or any of his employees.

The rules for cancellation of stamps

The rules for cancelling adhesive stamps are set out in Section 45 of the Stamp Duties Act 1954. This section reads -

• "45 (1) An instrument the duty on which is required or permitted by law to be denoted by an adhesive stamp affixed otherwise than by the Inland Revenue Department is not to be deemed duly stamped unless the person required by law to cancel the adhesive stamp cancels the same by writing on or across the stamp his name or initials, or the name or initials of his firm, together with the true date of his so writing, or otherwise effectively cancels the stamp and renders the same incapable of being used for any other instrument, or unless it is otherwise proved that the stamp appearing on the instrument was affixed thereto at the proper time.
• 
  
• "(2) When two or more adhesive stamps are used to denote the duty upon an instrument each of those stamps is to be cancelled in the manner aforesaid.
• 
  
• "(3) Every person who, being so required by law to cancel an adhesive stamp, neglects or refuses duly and effectively to do so in the manner aforesaid shall be guilty of an offence, and shall be liable on summary conviction to a fine not exceeding ten pounds."

Obligation on company secretaries

The authority given to sharebrokers to stamp certain transfers of shares with adhesive stamps will impose some obligation on company secretaries and others whose duty it is to register or record such transfers. This is imposed by Section 43 of the Stamp Duties Act 1954 which provides that, before transfers of shares or debentures are registered, the company and its officers must see that the transfers have been duly stamped.

The main point for company secretaries and others to observe is that transfers of shares may be stamped by a sharebroker with an adhesive stamp only if the shares have been sold through his agency for full value and for a price which does not exceed £20. The stamp duty involved in all such cases is 1/3.