ACCA Advanced Taxation (ATX) Practice Exam

Which of the following transfers is exempt from Stamp Duty?

1. Transfers between siblings

2. Gift transfers

3. Transfers after marriage

4. Transactions involving less than £10,000

The correct answer is: Gift transfers

The exemption of stamp duty on gift transfers stems from specific provisions in tax law that distinguish these transactions from commercial exchanges. When a property or asset is given as a gift, the transaction does not generally involve a monetary consideration, which is a fundamental factor in triggering stamp duty. Gift transfers are often viewed as altruistic and not as a means of profit or commercial interest. It is important to note that other methods of transferring ownership, such as transfers between siblings, transfers after marriage, and transactions involving sums less than £10,000, may have distinct criteria and possible exemptions, but they do not uniformly exempt the transaction from stamp duty in the same way gift transfers do. Each of these scenarios may have its own regulations or thresholds that could lead to tax implications. For instance, transfers between siblings are usually subject to stamp duty, although there might be some relief in certain cases under specific conditions, while transactions involving less than £10,000 might be subject to additional scrutiny or varying regulations depending on jurisdictions. Therefore, the clear exemption for gift transfers aligns with the principle of taxation targeting economic benefits rather than personal gifts.