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Where Taxpayers and Advisers Meet

Dividends in Specie

R Macro
Posts:3
Joined:Wed Aug 06, 2008 2:19 pm

Postby R Macro » Tue Nov 25, 2003 4:46 am

Hi,

I beleive that distributions of assets from a company to a shareholder may be immune from stamp duty, can anyone advise me why?

Rob

Ian McTernan CTA
Posts:1232
Joined:Wed Aug 06, 2008 3:02 pm
Location:Bedford
Contact:

Postby Ian McTernan CTA » Tue Nov 25, 2003 9:18 am

This rather depends on why the distribution is occurring in the first place and what type of distribution this is- dividend, proceeds from liquidation, and also what is being distributed.

If it is a dividend in specie then it does not usually attract stamp duty as the dividend falls to be taxed as income of the recipient and hence falls outside the net of stamp duty.

Not a stamp duty expert by any means and hopefully someone with more experience in this area will give a more technical explanation.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com
McTernan Associates Ltd
Chartered Tax Advisers
Bedford
Email through link on website:
http://www.imcternan.com

paulc
Posts:33
Joined:Wed Aug 06, 2008 3:04 pm

Postby paulc » Thu Nov 27, 2003 1:06 am

The basic reason is that stamp duty (under the old system) was payable on conveyances on sale, because the shareholder is not making any payment for the dividend in specie, there is no sale. Under the new system (post 1 Dec) duty is potentially payable on any land transaction - however for a dividend in specie, a shareholder is not making any payment for the transfer, and again the amount of duty is based on the amount paid. So, no duty

Paul


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