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HMRC internal manual

Stamp Taxes on Shares Manual

From
HM Revenue & Customs
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Scope of stamp duty on shares: stamp duty: basics of a charge: debt: debt released - examples

Example 1

A owes B £10,000. A owns some shares which are worth £10,000. B agrees to accept those shares in settlement of the debt. The chargeable consideration is the amount of the debt released, £10,000.

Example 2

A owes B £10,000. A owns some shares which are worth £11,000. B agrees to accept those shares in settlement of the debt and to give A £1,000. The chargeable consideration is the amount of the debt released plus the cash payment, £11,000.

Example 3

A owes B £10,000. A owns some shares which are worth £11,000. B agrees to accept those shares in settlement of the debt. The chargeable consideration is £10,000 i.e. the amount of the debt discharged.

Example 4

A owes B £10,000. A owns some shares which are worth £8,000. B agrees to accept those shares plus a cash payment of £2,000 to clear the debt. The chargeable consideration is £8,000.

Example 5

A owes B £10,000. A owns some shares worth £8,000. B agrees to accept those shares in settlement of the debt and writes off the balance. The chargeable consideration is limited to the market value of the shares, £8,000, by virtue of FA80/S102.