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STAMP DUTY General
Stamp duty is chargeable on all documents relating to land and land transactions, which directly (transfers, leases, easements) or indirectly (sale of shares of company owning land)
To be admitted into evidence (and thereby enforceable) in a Cayman Islands court, any document relating to land must be stamped.
“Ad valorem” stamp duty is payable within 45 days of execution. If executed outside the Cayman Islands, stamp duty is payable within 45 days of an executed, completed and delivered original of the document being brought into the Cayman Islands (for example, for enforcement). Otherwise, stamp duty is payable on execution in order to avoid penalties.
Transfer, Agreement or Memorandum of Agreement (Immovable Property) Ad valorem stamp duty is payable by transferee/assignee at the rate of: 7.5% or 6% or 4% on Transfer of Land The rate that will be applied depends on the location of the Property. For Caymanians and non -Caymanians, the rate is 7.5% for ocean front and canal front properties in the Seven Mile Beach corridor. For Caymanians, the rate is 4% for all other properties and 6% for non-Caymanians. Method of Calculation (Ad Valorem Stamp Duty)
Ad valorem stamp duty is always calculated on CI$. US$ (and other currencies) must be converted to CI$ at the Official Rate of Exchange Stamp Duty may be paid in CI$ or in US$ converted at the Bank Rate of Exchange Example Stamp duty is calculated as follows:
Penalties
Interest accrues on ad valorem stamp duty not paid within the period of 45 days beginning with the day on which it is first signed, first received in the Islands following that signing or release from escrow. Interest:
After 45 days, interest on unpaid stamp duty accrues from the date of execution at a rate of 10% per annum for the first month (or part month) and 20% per annum thereafter.
Unstamped instruments to be admitted as evidence in any court or tribunal must be stamped up as follows:
Exemptions, Nominal Stamp Duty and Available Waivers / Abatement
Exemptions and waivers are available from the Financial Secretary and in some cases from the registrar of Lands. The Financial Secretary has a general discretion to waive or abate the whole or part of duty payable (see section 20(6) of the Law). Waivers available from Registrar of Lands:
Transfers in Consideration of Natural Love and Affection (CI$50.00 Nominal Duty)
Spouse to or from Spouse
Parent to or from child
Sibling to or from sibling
Grandparent to or from grandchild
Transfer by Personal Representative to a Person Entitled under a Will or on an Intestacy
Waivers available from Financial Secretary (Discretionary):
Application may be made for a waiver of stamp duty with respect to Transfer resulting in no change in beneficial ownership as follows:
Company to Company
Shareholder(s) Company
Company to Shareholder(s)
Trustee to Beneficiary
Exempt Transfers
Any instruments conferring or vesting rights in a receiver.
Mortgages ( including Charge, Bill of Sale, Debenture, Hypothecation, Pledge)
Rate of Ad valorem Duty
Mortgage or Debenture relating to a charge of Immovable Property
1% for mortgage up to and including CI$ 300,000.00
1.5% for mortgages over CI$300,00
Mortgage relating to a charge of Movable Property 1.5% of sum secured
Bill of Sale
1% of sum secured
Exceptions
No duty payable on a mortgage with respect to property situated outside the Islands.
Maximum duty payable on a mortgage granted by an exempted company, ordinary non-resident company or foreign company in relation to movable property situated in the Islands is CI$500.00
Duty on collateral, auxiliary, additional or substituted security is $30.00 where primary security has been stamped.
Government incentive (From Financial Secretary)
Cayman Brac Development Properties
Stamp Duty Assessment/Stamp Duty Appeals
Assessments by the Commissioner (Registrar of Lands) with respect to ad valorem stamp duty my be appealed to Grand Court by notice of motion filed in Grand Court accompanied by an affidavit in support and all relevant documents.
Commissioner The Financial Secretary is the Commissioner for the collection of stamp duty.
The Commissioner is also the adjudicator of (ad valorem) stamp duty.
The Commissioner has authorized the Registrar of Lands to perform his functions.
Power of Attorney
Duty is $50.00
Exception
Power of Attorney with respect to immovable property given for consideration or declared to be irrevocable will be treated as a conveyance.
Timeshares No duty payable as under Cayman Islands law no interest in land is created by the time share contract.
Legal Share Mortgage
Legal or equitable mortgage over shares in exempted company or ordinary non-resident company now subject to a maximum duty of CI$500.00
Landholding Companies Share Transfer Tax
Landholding Companies Share Transfer Tax is similar to stamp duty and worth mentioning. Tax is required to be paid on transfer or issuance (or other dealing) of equity capital in a company which is the legal or beneficial owner of any land or is the legal or beneficial owner of any equity capital of a landholding company.
Exceptions
No tax payable where:
Transfer of shares in Landholding Company pursuant to legal share mortgage.
Transfer of shares for natural love and affection.
Transfer of shares from trustee/nominee resulting in no change in beneficial ownership.
Transfer of shares from personal representative.
Waiver / Abatement
Upon application being made, the Financial Secretary may waive tax otherwise payable on a transfer to or from landholding company where the transfer is to or from persons who is aggregate are the legal and beneficial owners of not less than 45% of the shares in the land holding company. Tax will be waived on a percentage basis.
Appeal
Same avenue of appeal to Grand Court is available in cases of disputes as to the market value of any property.
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