§ Mr. Cashasked the Chancellor of the Exchequer if he will clarify the scope of his Budget proposals relating to stamp duty.
§ Mr. Ian StewartFollowing announcement of the stamp duty proposals on Budget day, consultation with financial institutions and others concerned has indicated that certain technical changes should be made to ensure that the proposals operate in accordance with the intentions as announced. In response to representations, the Government therefore proposes to make the following changes.
My right hon. Friend announced that stamp duty would in future be payable on transfers of certain loan stocks. As the Inland Revenue press release issued on 18 March explained, this charge is not intended to apply to loans raised by various international organisations in respect of which the United Kingdom is under a treaty obligation to provide an exemption. The Resolution (no.36) giving temporary statutory effect to this proposal does not exempt certain loans raised by the Organisation for Economic Cooperation and Development, the Inter-American 305W Development Bank, the Asian Developmemt Bank and the African Development Bank. A revised version of the Resolution has accordingly been tabled today which ensures that such loans continue to be exempt.
My right hon. Friend also announced that there would be a charge of 5 per cent. on the conversion of United Kingdom shares into depositary receipts with immediate effect from 19 March. The Resolution covering this proposal is intended to apply to nominee companies which hold shares in connection with a bank's depositary receipt business. Representations have, however, been received suggesting that the Resolutions (nos.31 & 32) could also apply to certain nominee companies which hold securities for other purposes, and this also affects the Resolution (no.33) covering the related proposal to impose the same rate of duty on transfers of shares to certain clearing houses.
The Government are, therefore, withdrawing the appropriate Resolutions dealing with stamp duty on depositary receipts and transfers to clearing houses. Consultations are continuing, and amended provisions will accordingly be brought forward in due course. Meanwhile, however, the stamp duty reserve tax Resolution (no.40) remains in place. These changes do not therefore affect the Budget proposal for a charge at 5 per cent. from 19 March on the conversion of United Kingdom shares into depositary receipts. This charge also applies where shares are transferred into settlement systems which enable United Kingdom shares to be bought and sold without payment of stamp duty.