Stamp Duty exemption for charities
HMRC have issued a newsletter to clarify what evidence is required to support a claim for exemption from Stamp Duty Reserve Tax (SDRT) where the underlying purchaser is a charity. The newsletter includes new guidance where fund/investment managers will be allowed to assume responsibility and hold the evidence necessary for SDRT exemption for relevant charities. This scenario is common when a charity buys chargeable securities.
HMRC need to be satisfied that the ‘accountable person’ who is purchasing shares either directly or on instruction for a charity is able to demonstrate the following:
- Instructions to purchase shares have been received from a client that is a bona fide charity, or from a client acting for and on behalf of an underlying client that is a bona fide charity; and
- Checks have been undertaken to verify that the charity is, and continues to be, a registered charity and eligible for exemption from SDRT
The new guidance will take effect from 1 April 2009 to allow fund/investment managers time to submit an application seeking approval to HMRC and to be allocated with an HMRC reference number.