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Stamp duty

The Stamp Duty Land Tax (SDLT) reforms of the Autumn Statement stated "Stamp duty will be cut for 98% of people who pay it". There is little doubt, those purchasing properties up to £937,000 and between £1,000,001 and £1,000,024 are better off (although at £500,000 exactly, the tax remains the same as before). And this is no Trojan horse. Instead, it is a real piece of good news for a large part of the market, removing the previous cluster points around the old thresholds. This should free sellers to come to the market, as the rising tide raises the boats of those who felt it was not worth selling when prices were pegged unfairly below imposed increase markers. The choice of properties available around the previous thresholds should be a good thing. And for thosemoving to a larger property, the large steps around important price-points have been removed for many. Although the existence of a form of Stamp Duty can be traced back to Roman times, its history can be traced to the winning idea for a competition to find a new form of tax in the Netherlands in 1624, which required that certain legal documents be written on stamped paper. King James passed a law requiring the Ace of Spades to bear an insignia of the printing house as proof of payment of a tax on the local manufacture of cards. This ornamental embossing was also intended to prevent forgery of the revenue stamp. To forge an ace of spades was punishable by hanging, hence it is sometimes still known as the ‘hanging card’. In 1694, during the reign of William and Mary as ‘An act for granting to Their Majesties several duties on Vellum, Parchment and Paper for 4 years, towards carrying on the war against France’. The duties proved so successful that they were continued. The duty ranged from 1 penny to 40 shillings on a very wide variety of documents. These included insurance policies, documents in court proceedings, grants of honour, grants of probate and letters of administration. Stamp duty was extended to playing cards in 1711 by Queen Anne and lasted until 1960. All decks of playing cards printed and sold in the United Kingdom were liable to tax under the Stamp Act 1765, and the Ace of Spades carried an indication of the name of the printer and the fact that the tax had been paid. Also in 1765, the attempted imposition of Stamp Duties in America was met with opposition throughout the colonies. Protest meetings were held and the outcry of ‘no taxation without representation’ was raised. The arrival of ships bearing consignments of stamped papers was attended by major rioting - the most well-known being the Boston Tea Party. Consignments of stamped paper were burned and every appointed distributor was forced to resign. By 1793, Ad valorem (according to the value) Stamp Duty was introduced on grants of probate and letters of administration.In his budget speech of 1797 , William Pitt described Stamp Duty as a tax ‘easily raised, pressing little on any particular class, especially the lower orders of society, and producing a revenue safely and expeditiously collected at small expense’. He added that there had not been any considerable increases in Stamp Duty for some years... then virtually doubled the tax! It was not until 1808 that Stamp Duty was first imposed on conveyances for sales. At the same time duties in England and Scotland were made equal. Under the Stamp Act of 1815, ad valorem duty was extended to more categories of documents. The first adhesive postage stamp, the Penny Black was produced in 1840. The responsibility for supplying new postage stamps fell on the Stamps and Taxes Department. By 1914, the Director of Stamping supervised the production of the first Treasury Notes (later called banknotes). Responsibility for production of banknotes passed from the Department to the Bank of England in 1928. Similarly, in 1963, responsibility for the production of postage stamps passed to the Post Office. Stamp Duty then, is neither a new idea, nor is it new for it to change. However, with the promise of a New Year ahead, this is a real window of opportunity. Wild Bill Hickok is attributed with saying "The house always wins" and his famous final hand indeed contained an ace of spades - it seems, in this context, he was right! Winkworth Salisbury  

The Stamp Duty Land Tax (SDLT) reforms of the Autumn Statement stated "Stamp duty will be cut for 98% of people who pay it". There is little doubt, those purchasing properties up to £937,000 and between £1,000,001 and £1,000,024 are better off (although at £500,000 exactly, the tax remains the same as before).

And this is no Trojan horse. Instead, it is a real piece of good news for a large part of the market, removing the previous cluster points around the old thresholds. This should free sellers to come to the market, as the rising tide raises the boats of those who felt it was not worth selling when prices were pegged unfairly below imposed increase markers. The choice of properties available around the previous thresholds should be a good thing. And for thosemoving to a larger property, the large steps around important price-points have been removed for many.

Although the existence of a form of Stamp Duty can be traced back to Roman times, its history can be traced to the winning idea for a competition to find a new form of tax in the Netherlands in 1624, which required that certain legal documents be written on stamped paper.

King James passed a law requiring the Ace of Spades to bear an insignia of the printing house as proof of payment of a tax on the local manufacture of cards. This ornamental embossing was also intended to prevent forgery of the revenue stamp. To forge an ace of spades was punishable by hanging, hence it is sometimes still known as the ‘hanging card’.

In 1694, during the reign of William and Mary as ‘An act for granting to Their Majesties several duties on Vellum, Parchment and Paper for 4 years, towards carrying on the war against France’. The duties proved so successful that they were continued. The duty ranged from 1 penny to 40 shillings on a very wide variety of documents. These included insurance policies, documents in court proceedings, grants of honour, grants of probate and letters of administration.

Stamp duty was extended to playing cards in 1711 by Queen Anne and lasted until 1960. All decks of playing cards printed and sold in the United Kingdom were liable to tax under the Stamp Act 1765, and the Ace of Spades carried an indication of the name of the printer and the fact that the tax had been paid.

Also in 1765, the attempted imposition of Stamp Duties in America was met with opposition throughout the colonies. Protest meetings were held and the outcry of ‘no taxation without representation’ was raised. The arrival of ships bearing consignments of stamped papers was attended by major rioting - the most well-known being the Boston Tea Party. Consignments of stamped paper were burned and every appointed distributor was forced to resign.

By 1793, Ad valorem (according to the value) Stamp Duty was introduced on grants of probate and letters of administration.In his budget speech of 1797 , William Pitt described Stamp Duty as a tax ‘easily raised, pressing little on any particular class, especially the lower orders of society, and producing a revenue safely and expeditiously collected at small expense’. He added that there had not been any considerable increases in Stamp Duty for some years... then virtually doubled the tax!

It was not until 1808 that Stamp Duty was first imposed on conveyances for sales. At the same time duties in England and Scotland were made equal. Under the Stamp Act of 1815, ad valorem duty was extended to more categories of documents. The first adhesive postage stamp, the Penny Black was produced in 1840. The responsibility for supplying new postage stamps fell on the Stamps and Taxes Department. By 1914, the Director of Stamping supervised the production of the first Treasury Notes (later called banknotes). Responsibility for production of banknotes passed from the Department to the Bank of England in 1928. Similarly, in 1963, responsibility for the production of postage stamps passed to the Post Office.

Stamp Duty then, is neither a new idea, nor is it new for it to change. However, with the promise of a New Year ahead, this is a real window of opportunity.

Wild Bill Hickok is attributed with saying "The house always wins" and his famous final hand indeed contained an ace of spades - it seems, in this context, he was right!

Winkworth Salisbury

 

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