Our Share Schemes and Tax Expert Groups contributed to our response to the OTS's simplification review of residual paper Stamp Duty on shares.
We commented that HMRC being able to accept Electronic Stock Transfer Forms (E-STFs) would future-proof Stamp Duty administration and build long-term certainty and stability into the system, although a cost-benefit analysis would need to be taken into account. We added that an E-STF could be held in a secure portal that company registrars, Companies House, HMRC and other key stakeholders could access.
This notwithstanding, we also remarked that replacing the existing stamps with some form of electronic payment with a receipt being printed and attached to the paper STF would also be a practical improvement.
We commented that digitising Stamp Duty would bring substantial administrative cost savings in the form of eliminating the time delay in getting documents stamped at the Stamp Office in Birmingham. There would also be monetary savings in terms of not needing to send staff members to the Stamp Office directly, or use the ordinary postal system to send documents to the Stamp Office.
We remarked that Stamp Duty should be self-assessed, with an adjudication process being retained for complex transactions involving completion accounts, exemptions or reliefs.
We commented that making a pre-transaction clearance mechanism available for some complex transactions would be of considerable value and could bring significant monetary and time savings.
We encouraged the OTS not to recommend an umbrella Stamp Duty Reserve Tax; digital Stamp Duty should be available for paper transactions so that digital Stamp Duty is manually notified to HMRC, and SDRT for transactions within CREST.