EXPLANATORY NOTE
CLAUSE 127 AND SCHEDULE 34: ABOLITION OF DUTY ON INSTRUMENTS RELATING TO INTELLECTUAL PROPERTY
SUMMARY
This clause and schedule abolish the stamp duty charges on transactions in intellectual property with effect from 28 March 2000. Intellectual property includes patents, trade marks, copyrights, design rights, and plant breeders? rights as well as licences in respect of them.
Currently, some sales of intellectual property attract duty, at the same rates as sales of land and buildings. In addition, some transactions in intellectual property that are not sales attract a fixed duty of £5.
DETAILS OF THE CLAUSE
Subsection 1 abolishes the stamp duty charge on sales, transfers or other dispositions of intellectual property.
Subsection 2 defines intellectual property for the purpose of
subsection 1.
Subsection 3 gives effect to supplementary provisions in the Schedule.
Subsection 4 provides for the clause and Schedule to be construed as one with the Stamp Act 1891.
Subsections 5 and 6 are the commencement provisions. Subsection 5 applies the clause to instruments executed on or after 28 March 2000, and subsection 6 deems the section to have come into force on that date.
back to top
DETAILS OF THE SCHEDULE
Paragraph 1 provides that "intellectual property" has the same meaning in the schedule as in the clause.
Paragraph 2 provides for reduction of the stamp duty charge in certain cases.
Subparagraph (1) applies the paragraph to cases where property sold under an instrument consists partly of intellectual property and partly of other, chargeable, property.
By subparagraph (2), the consideration in such cases is to be apportioned between the intellectual property and the other property in a just and reasonable basis, and the instrument charged only in respect of the amount apportioned to the latter.
Subparagraph (3) applies the paragraph from 28 March 2000.
Paragraph 3 is about apportionment of consideration where property is sold by different instruments but for one consideration.
Subparagraph (1) provides for the apportionment of consideration between different instruments, under Section 58(1) Stamp Act 1891, to be on a just and reasonable basis where part of the property consists of intellectual property.
Subparagraph (2) amends Section 58(2) Stamp Act 1891 to provide for a similar apportionment where intellectual property is included in property contracted to be purchased by two or more persons who are relevant persons connected with one another.
By subparagraph (3), if consideration is apportioned other than in a just and reasonable manner stamp duty is to apply as if a just and reasonable apportionment had been made, and as if any consideration for a separate part of the property were determined on that basis.
Subparagraph (4) defines "a relevant person", and provides that whether persons are connected with one another is to be determined in accordance with the Taxes Act 1988.
Subparagraph (5) defines "the enactments relating to stamp duty".
Subparagraph (6) applies the paragraph to instruments executed on or after 28 March 2000.
Paragraph 4 provides that intellectual property is to be disregarded for the purpose of certifying that instruments do not form part of a larger transaction or series of transactions, with effect from 28 March 2000, and that such certification shall be interpreted accordingly.
Paragraph 5 concerns property acquired under statute.
Subparagraph (1) provides that where property is purchased under a statutory power, intellectual property need not be included in the conveyance required to be produced to the Commissioners by Section 12 Finance Act 1895.
Subparagraph (2) provides that where property acquired in these circumstances consists wholly of intellectual property, the conveyance need not be produced to the Commissioners.
Subparagraph (3) applies the paragraph to Acts falling within Section 12 Finance Act 1895 that are passed after 28 March 2000.
BACKGROUND
The stamp duty charge on conveyances on sale of interests in intellectual property arises under Part 1 of Schedule 13 to the Finance Act 1999, at the same rates as conveyances of land and buildings.
There are also fixed rate charges of £5 on certain transfers of intellectual property other than on sale, under Part III of Schedule 13.
back to top