Section 7 Instruments to be separately charged with duty in certain cases

(a) This section provides that if an instrument relates to several distinct matters it must be separately and distinctly charged in respect of each matter.

While “matters” is not defined examples of matters to which this paragraph would apply are:

• matters which fall under more than one head of charge:

  Example 1

  A sells one acre and lets a further 6 acres of his land to B. The conveyance and the lease are effected in a single document. That document contains 2 distinct matters – a conveyance on sale and a lease – and must be stamped accordingly.

  Example 2

  A sells an office block which he owns to B. B agrees to lease the office block back to A. A single document is drawn up to effect the sale and leaseback. That document contains 2 distinct matters – a conveyance on sale and a lease – and must be stamped accordingly.

• matters which are separate transactions:

  Example

  A owns a distribution business. He wants to retire so he agrees to sell the business to B. He grants a lease of the premises from which the business is carried on to B. In the same instrument he also grants a lease of 2 lorries to B. The lease relates to 2 distinct types of property – movable (i.e. the 2 lorries) and immovable (i.e. the premises). As leases of these 2 types of property are treated differently by the stamp duty code the instrument relates to 2 distinct matters and is chargeable accordingly i.e. the lease of the 2 lorries is not within the charge to stamp duty while the lease of the premises is.

If the matters are not truly distinct, but merely ancillary, this paragraph will not apply. A helpful test to apply is to ask whether each “matter” would stand on its own 2 feet (e.g. are the interests of the parties separate and independent). If it would then it is probably a distinct matter and must be stamped accordingly.

(b) Where an instrument is made for any consideration in respect of which it is chargeable with ad valorem stamp duty and also for any further or other valuable consideration then each one of the considerations is to be separately and distinctly charged as if separate instruments were involved.

Where there is a transfer or lease of mixed property (e.g. living quarters over a pub) that transfer or lease will be treated as if it were a transfer or lease of 2 separate properties – the residential element (i.e. the living quarters) attracting the rate of stamp duty appropriate to residential property and the non-residential element (i.e. the pub) attracting the rate appropriate to non-residential property.

This section does not apply where express provision to the contrary has been made – see sections 42(3), 43, 52(1) and (2), 57(3) and (4) and 62.

Relevant Date: Finance Act 2014