Finance Act, 1996

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Relief for member firms.

107.—(1) Stamp duty shall not be chargeable on any instrument of transfer whereby any securities upon the sale thereof are transferred to a member firm acting on its own behalf in the ordinary course of that member firm's business or to a nominee of such member firm:

Provided that if and to the extent that the member firm does not transfer those securities to a bona fide purchaser before the expiration of the period of one month from the date of the transfer, hereinafter in this section referred to as “the specified period”, the member firm shall pay to the Commissioners within 14 days after the expiration of the specified period the amount of ad valorem duty which would have been chargeable on the transfer if this section had not been enacted.

(2) If any member firm fails to pay any sum due to the Commissioners under the proviso to subsection (1), that sum, together with interest thereon at the rate of 1.25 per cent. per month or part of a month from the first day after the expiration of the specified period to the date of payment of that sum and, by way of further penalty, a sum equal to 1 per cent. of the duty for each day the duty remains unpaid, shall be recoverable from the member firm as a debt due to the Minister for Finance for the benefit of the Central Fund.

(3) Where the provisions of subsection (1) apply in relation to a transfer of securities to a member firm, the member firm shall within 30 days of the end of the relevant period within which the transfer is made deliver to the Commissioners a statement in writing or in such other manner as the Commissioners may agree to in writing—

(a) showing in respect of each such transfer—

(i) full details in relation to the type, nominal value, description and amount of the securities comprised in the transfer;

(ii) what part, if any, of the securities comprised in the transfer has been transferred by the member firm to a bona fide purchaser within the specified period and what part of the securities has not been so transferred;

(iii) the date of the transfer and, if any part of the securities has been transferred to a bona fide purchaser within the specified period, the date on which that part was so transferred;

(iv) the amount of stamp duty (if any) payable by virtue of the proviso to subsection (1) and the date of payment;

(b) certifying in respect of each such transfer that—

(i) the member firm was acting on its own behalf in the ordinary course of that member firm's business, and

(ii) any securities transferred in respect of which the stamp duty has not been paid were transferred on sale to a bona fide purchaser within the period of one month after the date of the transfer,

and shall produce such further evidence by way of statutory declaration or otherwise in relation to the matters aforesaid as the Commissioners require.

(4) A member firm which fails to deliver a statement within the period specified in subsection (3), shall be liable to a fine of £1,000.

(5) Section 42 of the Finance Act, 1920 , section 35 of the Finance Act, 1935 , and section 32 of the Finance Act, 1961 , are hereby repealed.