Point in Time
Act No: CAP. 480
Act Title: STAMP DUTY
[ Date of commencement: 1st October, 1958. ]
[ Date of assent: 11th August, 1958. ]
Arrangement of Sections
PART I – PRELIMINARY
1.
Short title

This Act may be cited as the Stamp Duty Act.

3.
Application of Act

This Act shall apply to all stamp duties and to all fees and penalties which are for the time being directed to be collected or received by means of stamps under or by virtue of any written law.

PART II – PROVISIONS APPLICABLE TO INSTRUMENTS GENERALLY
Charge of Duty upon Instruments
6.
Time of stamping and liability for stamping
(1)

Subject to the provisions of this Act or of any other written law, every instrument, unless it is written on duly stamped material, shall be duly stamped with the proper duty before the expiration of thirty days after it is first executed, or after it has been first received in Kenya in case it is first executed at any place out of Kenya, unless the opinion of a collector with respect to the amount of duty with which the instrument is chargeable has, before the expiration of that period, been required under section 17.

(2)

If the opinion of a Collector with respect to the amount of duty with which any instrument is chargeable has been required under section 17, the instrument shall be stamped in accordance with the assessment of the collector within twenty-one days of the date of the notice of the assessment.

(3)

Where in the Schedule or in any other written law it is specified that an instrument is to be stamped before execution, it shall be stamped before execution by any party thereto.

(4)

If any instrument which is chargeable with stamp duty is not duly stamped, the person or persons respectively specified in the Schedule or in any other written law as being liable for stamping shall be liable, or jointly and severally liable, as the case may be, to the collector for the payment of the specified duty.

(5)

If any instrument which is liable to stamp duty is not duly stamped, every person specified in the Schedule or in any other written law as being responsible for stamping shall also be guilty of an offence and liable to a fine not exceeding two thousand shillings.

(6)

Where in the Schedule or in any other written law the responsibility for stamping is imposed upon more persons than one, every person on whom that responsibility is imposed may, if the instrument is not duly stamped, be proceeded against either civilly or criminally without reference to any civil liability of the parties inter se for the payment of the stamp duty.

[Act No. 5 of 1960, s. 3.]

7.
Duties, how to be paid

Except as otherwise expressly provided in this Act, all duties with which any instruments are chargeable shall be paid, and payment shall be denoted upon the instruments, by means of stamps in such manner as may be prescribed.

8.
How instruments are to be written and stamped
(1)

Every instrument written upon stamped material shall be written in such manner, and every instrument partly or wholly written before being stamped shall be so stamped, that the stamp may appear on the face of the instrument, and cannot be used for or applied to any other instrument written upon the same piece of material.

(2)

If more than one instrument is written upon the same piece of material, every one of the instruments shall be separately and distinctly stamped with the duty with which it is chargeable.

9.
Instruments to be separately charged in certain cases
(1)

An instrument containing or relating to several distinct matters shall be separately and distinctly charged, as if it were a separate instrument, with duty in respect of each of the matters.

(2)

An instrument made for any consideration in respect whereof it is chargeable with ad valorem duty, and also for any further or other valuable consideration or considerations, shall be separately and distinctly charged, as if it were a separate instrument, with duty in respect of each of the considerations.

11.
Mode of calculating ad valorem duty in certain cases
(1)

Subject to the provisions of subsection (2), where an instrument is chargeable with ad valorem duty in respect of—

(a)

any money in any currency other than that of Kenya; or

(b)

any stock or marketable security,

the duty shall be calculated on the value, on the day of the date of the instrument, of the money in Kenya currency according to the current rate of exchange, or of the stock or security according to the average price thereof:

Provided that where stock or security is the consideration for any conveyance or transfer of property, and, in the opinion of the collector, the consideration is inadequate having regard to the actual value of the stock or security, ad valorem duty shall be chargeable on the value of the property to be conveyed or transferred.

(2)

Notwithstanding the provisions of subsection (1), where any instrument other than a bill of exchange or promissory note is charged with an ad valorem duty in respect of any money in any currency other than that of Kenya and a rate of exchange is prescribed by regulations made under this Act for that currency, then the stamp duty on that instrument shall be calculated according to the prescribed rate of exchange.

(3)

Where an instrument contains a statement of current rate of exchange, or average price, as the case may require, and is stamped in accordance with that statement it shall, so far as regards the subject matter of the statement, be deemed to be duly stamped, unless or until it is shown that the statement is untrue and that the instrument is in fact insufficiently stamped.

12.
Instruments to be in English

Every instrument chargeable with duty shall be written in the English language, or shall have annexed thereto a full and accurate translation thereof into the English language, certified to the satisfaction of the collector.

Use of Adhesive Stamps
Denoting Stamps
16.
Denoting stamps

Where the duty with which an instrument is chargeable depends in any manner upon the duty paid upon another instrument, the payment of the last-mentioned duty shall, upon application to a collector and production of both the instruments, be denoted upon the first-mentioned instrument in such manner as may be prescribed.

Adjudication Stamps
17.
Adjudication
(1)

Subject to any regulations made under this Act, a collector may be required by any person, on payment by that person of a fee of one hundred shillings, to express his opinion with reference to any executed instrument upon the following questions—

(a)

whether it is chargeable with any duty;

(b)

with what amount of duty it is chargeable.

(2)

The collector may require to be furnished with an abstract of the instrument, and also with such evidence as he may deem necessary in order to show to his satisfaction whether all the facts and circumstances affecting the liability of the instrument to duty, or the amount of duty chargeable thereon, are fully and truly set forth therein.

(3)

If the collector is of the opinion that the instrument is not chargeable with any duty it shall be stamped with a particular stamp denoting that it is not chargeable with any duty.

(4)

If the collector is of the opinion that the instrument is chargeable with duty he shall assess the duty with which it is in his opinion chargeable, and when the instrument is stamped in accordance with the assessment it shall be stamped with a particular stamp denoting that it is duly stamped.

(5)

Every instrument stamped with the particular stamp, denoting either that it is not chargeable with any duty or that it is duly stamped, shall be admissible in evidence and available for all purposes notwithstanding any objection relating to duty.

(6)

An instrument upon which the duty has been assessed by the collector shall not, if it is unstamped or insufficiently stamped, be stamped otherwise than in accordance with the assessment.

(7)

Nothing in this section shall extend to any instrument chargeable with ad valorem duty, and made as a security for money or stock without limit; or shall authorize the stamping after the execution thereof of any instrument which by law cannot be stamped after execution.

(8)

A statutory declaration made for the purpose of this section shall not be used against any person making it in any proceedings whatever, except in an inquiry as to the duty with which the instrument to which it relates is chargeable; and, if the declaration is true, every person by whom it is made shall, on payment of the duty chargeable upon the instrument to which it relates, be relieved from any fine or disability to which he may be liable by reason of the omission to state truly in the instrument any fact or circumstance required by this Act to be stated therein.

Production of Instruments in Evidence and Instruments not duly Stamped
19.
Non-admissibility of unstamped instruments in evidence; and penalty
(1)

Subject to the provisions of subsection (3) of this section and to the provisions of sections 20 and 21, no instrument chargeable with stamp duty shall be received in evidence in any proceedings whatsoever, except—

(a)

in criminal proceedings; and

(b)

in civil proceedings by a collector to recover stamp duty,

unless it is duly stamped.

(2)

No instrument chargeable with stamp duty shall be filed, enrolled, registered or acted upon by any person unless it is duly stamped.

(3)

Upon the production to any court (other than a criminal court), arbitrator, referee, company or other corporation, or to any officer or servant of any public body, of any instrument which is chargeable with stamp duty and which is not duly stamped, the court, arbitrator, referee, company or other corporation, or officer or servant, shall take notice of the omission or insufficiency of the stamp on the instrument and thereupon take action in accordance with the following provisions—

(a)

if the period of time within or before which the instrument should have been stamped has expired and the instrument is one in respect of which a person is specified in the Schedule to this Act as being liable for the stamping thereof, the instrument shall be impounded and, unless the instrument has been produced to a collector, shall forthwith be forwarded to a collector;

(b)

in any such case, before the exclusion or rejection of the instrument, the person tendering it shall, if he desires, be given a reasonable opportunity of applying to a collector for leave under section 20 or of obtaining a certificate under section 21;

(c)

in all other cases, unless otherwise expressly provided in this Act, the instrument shall, saving all just exceptions on other grounds, be received in evidence upon payment to the court, arbitrator or referee of the amount of the unpaid duty and of the penalty specified in subsection (5), and the duty and penalty, if any, shall forthwith be remitted to a collector with the instrument to be stamped after the instrument has been admitted in evidence.

(4)

If any person is empowered or required by any written law to act upon, file, enrol or register a duplicate or copy of any instrument, and if the original of that instrument would require to be duly stamped if acted upon, filed, enrolled or registered by that person, that person may call for the production of the original instrument or for evidence to his satisfaction that it was duly stamped, and no person shall act upon, file, enrol or register any such duplicate or copy without production of the original instrument duly stamped or of evidence thereof.

(5)

The penalty on stamping any instrument out of time referred to in paragraph (c) of subsection (3) shall be ten shillings in respect of every twenty shillings and of any fractional part of twenty shillings of the duty chargeable thereon and in respectof every period of three months or any part of such a period after the expiration of the time within or before which the instrument should have been stamped.

21.
Certain improperly stamped instruments

Subject to the provisions of this Act, where an instrument bears a stamp of sufficient amount but of improper description, it may, on payment of the duty with which it is chargeable and of a penalty of ten shillings, be certified to be duly stamped, and any instrument so certified shall then be deemed to have been duly stamped.

22.
Effect of noncompliance in case of certain bills of exchange

Notwithstanding any written law to the contrary, a bill of exchange which is presented for acceptance, or accepted, or payable, outside Kenya, or a cheque, whether presented for acceptance, or accepted, or payable, outside or inside Kenya, shall not be invalid by reason only that it is not stamped in accordance with the provisions of this Act, and any such bill of exchange or cheque which is unstamped or not properly stamped may be received in evidence on payment of the proper duty and penalties as provided by sections 19 and 20.

23.
Instruments executed out of Kenya

Every instrument executed out of Kenya by any person, not being a bill of exchange or a promissory note, shall, before being used, brought into force or registered, within Kenya, be stamped according to the rate of duty chargeable thereon in accordance with this Act, whatever the provision of the Schedule may be with regard to the time before which or the period within which such an instrument, if executed in the first instance within Kenya, should be stamped.

[Act No. 5 of 1960, s. 5.]

Miscellaneous
24.
Refund where instrument erroneously assessed

If the Senior Collector of Stamp Duties is satisfied that an instrument has been erroneously assessed with duty or penalty, he may, if application for a refund is made at any time within one year after the date of the payment of that duty or penalty, refund the amount thereof to the person by whom it was paid.

25.
Splitting
(1)

Where any minimum amount is prescribed below which stamp duty shall not be payable, no person shall execute more instruments than would ordinarily be necessary for the transaction in question in order to evade stamp duty.

(2)

Where a scale is prescribed under which the rate of stamp duty is increased after passing certain limits, no person shall execute more instruments than would ordinarily be necessary for the transaction in question in order to evade stamp duty.

(3)

In any question arising under this section the onus of proof shall lie upon the person who asserts that there has been no splitting in order to evade stamp duty.

28.
Stamp where value of subject-matter is indeterminate.

Where the amount or value of the subject-matter of any instrument chargeable with ad valorem duty cannot be, or (in the case of an instrument executed before the commencement of this Act) could not have been, ascertained at the date of its execution, or first execution, nothing shall be claimable under the instrument more than the highest amount or value for which, if stated in an instrument of the same description, the stamp actually used would, at the date of such execution, have been sufficient:

Provided that if the owner of an instrument which was duly stamped in accordance with the information then available to him receives information showing that the instrument is insufficiently stamped, and produces the instrument with the information to a collector within twenty-one days after receipt, the instrument may be stamped without penalty for such further sum as is proper, but this proviso shall not apply to instruments which are required to be stamped before execution.

PART III – PROVISIONS APPLICABLE TO PARTICULAR INSTRUMENTS
Agreements
Bills of Exchange and Promissory Notes
32.
Meaning of “bill of exchange”

For the purposes of this Act, “bill of exchange” includes draft, order, cheque and letter of credit, and any other document or writing entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money; and “bill of exchange payable on demand” includes—

(a)

an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen; and

(b)

an order for the payment of any sum of money weekly, or monthly, or at any other stated periods, and also an order for the payment by any person at any time after the date thereof of any sum of money, and sent or delivered by the person making it to the person by whom the

payment is to be made, and not to the person to whom the payment is to be made, or to any person on his behalf.

33.
Meaning of “promissory note”
(1)

For the purposes of this Act, “promissory note” includes any document or writing containing a promise to pay any sum of money.

(2)

A note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, shall be deemed a promissory note for that sum of money.

34.
Provisions as to stamping foreign bills and notes
(1)

A person into whose hands a bill of exchange or promissory note drawn or made out of Kenya comes into Kenya before it is stamped shall, before he presents for payment, or endorses, transfers or in any manner negotiates, or pays, the bill or note, affix thereto the proper stamp, and, if an adhesive stamp, cancel it:

Provided that—

(i) if at the time when the bill or note comes into the hands of a bona fide holder there is affixed thereto an adhesive stamp effectually cancelled, the stamp shall, so far as relates to the holder, be deemed to be duly cancelled, although it may not appear to have been affixed or cancelled by the proper person; and
(ii) if at the time when the bill or note comes into the hands of a bona fide holder there is affixed thereto an adhesive stamp not duly cancelled, the holder may cancel the stamp as if he were the person by whom it was affixed, and upon his so doing the bill or note shall be deemed to be duly stamped, and as valid and available as if the stamp had been cancelled by the person by whom it was affixed.
(2)

Nothing contained in subsection (1) shall relieve any person from any fine or penalty to which he may be liable for not cancelling an adhesive stamp.

[L.N. 73/1989, s. 2.]

35.
As to bills and notes purporting to be drawn abroad

A bill of exchange or promissory note which purports to be drawn or made out of Kenya shall, for the purpose of determining the mode in which the stamp duty thereon is to be denoted, be deemed to have been so drawn or made, although it may in fact have been drawn or made within Kenya.

37.
One bill only of a set need be stamped

Where a bill of exchange is drawn in a set according to the custom of merchants, and one of the set is duly stamped, the other or others of the set shall, unless issued or in some manner negotiated apart from the stamped bill, be exempt from duty; and, upon proof of the loss or destruction of a duly stamped bill forming one of the set, any other bill of the set which has not been issued or in any manner negotiated apart from the lost or destroyed bill may, although unstamped, be admitted in evidence to prove the contents of the lost or destroyed bill.

Chattels Transfers
Companies
39.
Charge of duty on capital of companies

A statement of the amount which is to form the nominal share capital of any company to be registered with limited liability shall be delivered to the Registrar of Companies and a statement of the amount of any increase of registered capital of a company now registered or to be registered with limited liability shall be delivered to the Registrar, and every such statement shall be charged with an ad valorem stamp duty.

Contract Notes
40.
Provision as to contract notes
(1)

For the purposes of this Act, “contract note” means the note sent by a broker or agent to his principal, or by any person who by way of business deals, or holds himself out as dealing, as a principal in any stock or marketable securities, advising the principal or the vendor or purchaser, as the case may be, of the sale or purchase of any stock or marketable security, but does not include a note sent by a broker or agent to his principal where the principal is himself acting as broker or agent for a principal.

(2)

Where a contract note is a continuation or carrying over note made for the purpose of continuing or carrying over any transaction for the sale or purchase of stock or marketable securities, the contract note, although it is made in respect of both the sale and purchase, shall be charged with duty under this section as if it related to one of those transactions only, and, if different rates of duty are chargeable in respect of those transactions, to that one of those transactions which would render the contract note chargeable at the highest rate.

(3)

Where a contract note advises the sale or purchase of more than one description of stock or marketable security, the note shall be deemed to be as many contract notes as there are descriptions of stocks or securities sold or purchased.

42.
Extension of provisions as to contract notes to sale or purchase of options
(1)

The provisions of this Act as to contract notes shall apply to any contract under which an option is given or taken to purchase or sell any stock or marketable security at a future time at a certain price, as it applies to the sale or purchase of any stock or marketable security, but the duty on such a contract shall be one-half only of that chargeable on a contract note:

Provided that, if under the contract a double option is given or taken, the contract shall be deemed to be a separate contract in respect of each option.

(2)

Any contract note made or executed in pursuance and in consequence of the exercise of an option given or taken under a contract duly stamped in accordance with the provisions of this section shall be charged with one-half only of the duty which would otherwise have been chargeable thereon under this Act, provided it bears on its face a certificate by the broker, agent or other person mentioned in section 41 to the effect that it is made or executed in the exercise of an option for which a duly stamped contract has been rendered on the date mentioned in the certificate.

Conveyances on Sale
43.
Meaning of “conveyance on sale”
(1)

For the purposes of this Act, “conveyance on sale” includes—

(a)

an instrument, and a decree or order of a court, whereby any property, or any estate or interest in property, upon the sale thereof is transferred to or vested in a purchaser, or any other person on his behalf or by his direction;

(b)

a decree or order for, or having the effect of an order for, foreclosure:

Provided that—

(i) the ad valorem duty upon any such decree or order shall not exceed the duty on a sum equal to the value of the property to which the decree or order relates, and where the decree or order states that value that statement shall be conclusive for the purpose of determining the amount of duty; and
(ii) where ad valorem duty is paid upon the decree or order any conveyance following upon the decree or order shall be exempt from ad valorem duty.
(2)

Any vesting order by the court shall bear the same stamp as if it were a conveyance on sale.

44.
How ad valorem duty is to be calculated in respect of stock and securities
(1)

Where the consideration, or any part of the consideration, for a conveyance on sale consists of any stock or marketable security, the conveyance shall be charged with ad valorem duty in respect of the value of the stock or security.

(2)

Where the consideration, or any part of the consideration, for a conveyance on sale consists of any security not being a marketable security, the conveyance shall be charged with ad valorem duty in respect of the amount due on the day of the date thereof for principal and interest upon the security.

46.
Conveyance on sale with further covenant

A conveyance on sale made for any consideration in respect whereof it is chargeable with ad valorem duty, and in further consideration of a covenant by the purchaser to make, or of his having previously made, any substantial improvement of or addition to the property conveyed to him, or of any covenant relating to thesubject matter of the conveyance, shall not be chargeable, and shall be deemed not to have been chargeable, with any duty in respect of such further consideration.

47.
How conveyance in consideration of a debt, etc., to be charged

Where any property is conveyed to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the

payment or transfer of any money or stock, whether being or constituting a charge or encumbrance or not, the debt, money or stock shall be deemed to be the whole or part, as the case may be, of the consideration in respect whereof the conveyance is chargeable with ad valorem duty.

50.
As to sale of an annuity or right not before in existence
(1)

Where upon the sale of any annuity or other right not before in existence the annuity or other right is not created by actual grant or conveyance, but is only secured by bond, warrant of attorney, covenant, contract or otherwise, the bond or other instrument, or some one of the instruments if there are more than one, shall be charged with the same duty as an actual grant or conveyance and shall for the purposes of this Act be deemed to be an instrument of conveyance on sale.

(2)

Notwithstanding the provisions of subsection (1), an instrument being a grant or contract for payment of a purchased life annuity shall be chargeable with stamp duty under paragraph (3) of the heading Bond, Covenant or Instrument of any kind whatsoever in the Schedule, whether or not the annuity is a superannuation annuity as defined in that paragraph.

(3)

In this section, “purchased life annuity” means a life annuity granted for consideration in money or money’s worth in the ordinary course of a business of granting annuities on human life.

51.
Principal instrument how to be ascertained

The parties may determine for themselves which of several instruments shall be deemed to be the principal instrument and may pay the ad valorem duty thereon accordingly:

Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of those instruments.

Conveyances on any Occasion except Sale or Transfer
Duplicates and Counterparts
54.
Provision as to duplicates and counterparts

The duplicate or counterpart of an instrument chargeable with duty shall not be deemed to be duly stamped unless it is stamped as an original instrument, or unless it appears by some stamp impressed thereon that the full and proper duty has been paid upon the original instrument of which it is the duplicate or counterpart.

Leases and Licences
55.
Agreements to be charged as leases
(1)

An agreement for a lease, or in respect of any letting, shall be charged with the same duty as if it were an actual lease made for the term and consideration mentioned in the agreement.

(2)

A lease made subsequently to, and in conformity with, such an agreement duly stamped shall be charged with the duty of five shillings only.

[Act No. 8 of 1985, s. 21(f).]

56.
Duty on leases where consideration consists of rent

Every lease shall, so far as the consideration therefor consists of rent, whether reserved as a yearly rent or otherwise, be charged with duty in accordance with the heading Lease in the Schedule.

57.
Duty on leases in other cases

A lease shall, so far as the consideration therefor consists of any premium or other consideration whatsoever other than rent, moving either to the lessor or to any other person, be charged with ad valorem stamp duty computed on that consideration as if it were a conveyance on sale for the amount of that consideration.

58.
Duty on leases granted in perpetuity

A lease granted in perpetuity shall be charged with ad valorem stamp duty as if it were a conveyance on sale, and the duty shall be computed on the value of the property.

59.
Leases, how to be charged in respect of produce, etc.
(1)

Where the consideration, or any part of the consideration, for which a lease is granted or agreed to be granted, consists of any produce or other goods, the value of the produce or goods shall be deemed a consideration in respect of which the lease or agreement is chargeable with ad valorem duty.

(2)

Where it is stipulated that the value of the produce or goods is to amount at least to, or is not to exceed, a given sum, or where the lessee is specially charged with or has the option of paying after any permanent rate of conversion, the value of the produce or goods shall, for the purpose of assessing the ad valorem duty, be estimated at the given sum, or according to the permanent rate.

(3)

A lease or an agreement for a lease made either wholly or partially for any such consideration, if it contains a statement of the value thereof, and is stamped in accordance with the statement, shall, so far as regards the subject-matter of the statement, be deemed to be duly stamped, unless or until it is otherwise shown that the statement is incorrect, and that the lease or agreement is in fact not duly stamped.

60.
Directions as to duty on instruments increasing rent and on certain leases
(1)

An instrument, whereby the rent reserved by any other instrument chargeable with duty and duly stamped as a lease is increased, shall not be charged with duty otherwise than as a lease in consideration of the additional rent thereby made payable.

(2)

If, in accordance with the articles of association of any company, or in pursuance of any agreement with any company, a shareholder in that company is entitled to a lease from the company, then—

(a)

where such a lease is granted to the first holder of the shares, the consideration paid to the company for the shares shall be deemed to be a premium in respect of the lease, and the lease shall be chargeable with ad valorem duty accordingly;

(b)

where such a lease is granted to a subsequent holder of the shares, the consideration paid by the holder for the shares shall be deemed to be a premium paid in respect of the lease notwithstanding that no consideration may have been paid to the company, and the lease shall be chargeable with ad valorem duty accordingly, but, where the lease has been so charged, the duty on the share transfer shall be charged at the rate of five shillings only, and, if ad valorem duty has already been paid thereon in an amount exceeding five shillings, allowance shall be made for the excess;

(c)

where such a lease is assigned to a holder or transferee of shares, the consideration paid by the holder or transferee for the shares shall be deemed to be consideration for the assignment of the lease, and the assignment shall be chargeable with ad valorem duty accordingly, but, where the assignment has been so charged, the duty on the share transfer shall be charged at the rate of five shillings only, and, if ad valorem duty has already been paid thereon in an amount exceeding five shillings, allowance shall be made for the excess;

(d)

for the purposes of paragraphs (b) and (c), “consideration” includes the value of any shares comprised in a transfer operating, for the purposes of section 52, as a voluntary disposition inter vivos.

[Act No. 8 of 1985, s. 21(g).]

61.
Duty on leases granted for inadequate consideration

A lease granted for a consideration which in the opinion of the Collector is inadequate, unless it is a lease granted by the Government, shall, in respect of the consideration therefor, be charged in accordance with the foregoing provisions; and such a lease shall also be charged as if it were an instrument operating as a voluntary disposition inter vivos in respect of the value of the leasehold interest after deducting the amount of the consideration.

[L. N. 236/1964, Sch., Act No. 21 of 1966, Sch.]

63.
Licences
(1)

Every licence relating to immovable property shall for the purposes of this Act be deemed to be a lease by the grantor of the licence to the grantee, and shall be charged with duty accordingly.

(2)

In the application to licences of the provisions of this Act with respect to leases, every consideration which would have been rent if the licence had been a lease shall be deemed to be rent, and duty shall be charged accordingly.

Marketable Securities
64.
Meaning of marketable securities for charge of duty and foreign and Commonwealth share certificate

Marketable securities for the purpose of the charge of duty thereon, whether or not transferable by delivery, include—

(a)

a marketable security made or issued by or on behalf of any company or body of persons corporate or unincorporate formed or established in Kenya; and

(b)

a marketable security by or on behalf of any foreign State or government, or Commonwealth or foreign municipal body, corporation or company (hereinafter called a foreign security)—

(i) which is made or issued in Kenya; or
(ii) which, though originally issued out of Kenya, is offered for subscription, and is given or delivered to a subscriber in Kenya; or
(iii) which is assigned, transferred or in any other manner negotiated in Kenya; and
(c)

a marketable security by or on behalf of the government of any country in the Commonwealth which, if the borrower were a foreign government, would be a foreign security (hereinafter called a Commonwealth government security); and

(d)

a share warrant or stock certificate to bearer, or any other instrument to bearer, by means of which any share or stock of any company or body of persons formed or established out of Kenya is assigned, transferred or in any manner registered in Kenya.

66.
Foreign or Commonwealth securities may be stamped without penalty

A collector may at any time, without reference to the date thereof, allow a foreign security or Commonwealth government security to be stamped without the payment of any penalty, upon being satisfied, in any manner that he may think proper, that it was not made or issued, and has not been transferred, assigned or negotiated, within Kenya.

67.
Meaning of marketable security transferable on delivery and instrument to bearer

An instrument used for the purpose of assigning, transferring or in any manner negotiating the right to any marketable security, share or stock shall, if the delivery thereof is by usage treated as sufficient for the purpose of a sale on the market, whether that delivery constitutes a legal assignment, transfer or negotiation or not, be deemed to be a marketable security transferable on delivery, or an instrument to bearer, as the case may be, and the delivery thereof an assignment, transfer or negotiation.

Mortgages, etc.
68.
Meaning of “mortgage” and “equitable mortgage” and provisions in relation to equitable mortgages
(1)

For the purposes of this Act, “mortgage” means a legal charge or security by way of mortgage for the payment of any definite or certain sum of money advanced or lent at the time, or previously due and owing or foreborne to be paid, being payable, or for the repayment of money to be thereafter lent, advanced or paid, or which may become due upon an account current, together with any sum already advanced or due, or without, as the case may be; and includes—

(a)

a conditional surrender by way of mortgage, charge, further charge or disposition; and

(b)

any conveyance of any property in trust to be sold or otherwise converted into money intended only as a security, and redeemable before the sale or other disposal thereof, either by express stipulation or otherwise; and

(c)

any instrument in writing for defeating or making redeemable or explaining or qualifying any conveyance, transfer, disposition or

assignation of any immovable property, apparently absolute, but intended only as a security; and

(d)

any agreement (other than an agreement chargeable with duty as an equitable mortgage), contract or bond accompanied with a deposit of title deeds or with other instruments evidencing a right to property, for making a mortgage, or any other security or conveyance as aforesaid of any property comprised in the title deed, or for pledging or charging the same as a security; and

(e)

any deed operating as a mortgage of any stock or marketable security,

but does not include an instrument registrable under the Chattels Transfer Act (Cap. 28).

(2)

For the purpose of this Act “equitable mortgage” means an agreement or memorandum relating to the deposit of any title deeds or instruments constituting or being evidence of the title to any property (other than any stock or marketable security) or creating a charge on the property.

(3)

(a) There shall be embodied in every equitable mortgage a certificate setting forth the amount secured thereby, or, if such be the case, that the amount secured is uncertain.

(b) In the case of an equitable mortgage to which the provisions of subsection (2) of section 70 apply, where any advance of loan is made in excess of the amount covered by the ad valorem duty impressed thereon, there shall be presented with or endorsed on the equitable mortgage, when it is presented for stamping, a certificate setting forth the amount of the advance or loan so made.

(c) There shall be embodied in every discharge of an equitable mortgage a certificate setting forth the greatest amount which was at any time secured by the mortgage.

(d) Nothing shall be claimable under any equitable mortgage more than the highest amount for which the stamp actually used would, at the date of the stamping thereof, have been sufficient.

68A.
Islamic property finance arrangement

In any mortgage under which—

(a)

a financial institution provides an Islamic finance arrangement that enables a person to own property or land; and

(b)

where the title or interest in the property or land is first transferred to the financial institution from the vendor and afterwards to that person,

the duty shall be charged on the transfer of the title or interest to the financial institution by the vendor but shall not be charged on the transfer of the title or interest from the financial institution to that person.

69.
Direction as to duty in certain cases
(1)

A security for the transfer or re-transfer of any stock shall be charged with the same duty as a similar security for a sum of money equal in amount to the value of the stock; and a transfer, assignment or disposition of any such security, and a reconveyance, release, discharge, surrender, resurrender, warrant to vacate or renunciation of any such security, shall be charged with the same duty as an instrument of the same description relating to a sum of money equal in amount to the value of the stock.

(2)

A security for the payment of any rent charge, annuity or periodical payments, by way of repayment, or in satisfaction or discharge of any loan, advance or payment intended to be so repaid, satisfied or discharged, shall be charged with the same duty as a similar security for the payment of a sum of money so lent, advanced or paid.

(3)

A transfer of a duly stamped security, and a security by way of further charge for money or stock added to money or stock previously secured by a duly stamped instrument, shall not be charged with any duty by reason of it containing any further or additional security for the money or stock transferred or previously secured, or the interest or dividends thereof, or any new covenant, proviso, power, stipulation or agreement in relation thereto, or any further assurance of the property comprised in the transferred or previous security.

(4)

An instrument chargeable with ad valorem duty as a mortgage shall not be charged with any further duty by reason of the equity of redemption in the mortgaged property being thereby conveyed or limited in any other manner than to a purchaser, or in trust for, or according to the direction of, a purchaser.

70.
Security for future advances how to be charged
(1)

A security for the payment or repayment of money to be lent, advanced or paid, or which may become due upon an account current, either with or without money previously due, shall be charged, where the total amount secured or to be ultimately recoverable is in any way limited, with the same duty as a security for the amount so limited.

(2)

Where such total amount is unlimited, the security shall be available for such an amount only as the ad valorem duty impressed thereon extends to cover, but where any advance or loan is made in excess of the amount covered by that duty the security shall, for the purpose of stamp duty, be deemed to be a new and separate instrument bearing date on the day on which the advance or loan is made.

(3)

Notwithstanding the foregoing provisions of this section, no money to be advanced for the insurance of any property comprised in the security against damage by fire, or for keeping up any policy of life insurance comprised in the security, or for effecting in lieu thereof any new policy, or for the renewal of any grant or lease of any property comprised in the security upon the dropping of any life whereon the property is held, shall be reckoned as forming part of the amount in respect whereof the security is chargeable with ad valorem duty.

Partitions
Policies of Insurance
72.
Meaning of “policy of insurance”

For the purposes of this Act, “policy of insurance” includes any writing whereby a contract of insurance is made or agreed to be made, or is evidenced; and “insurance” includes assurance.

73.
Meaning of “policy of marine insurance”
(1)

For the purposes of this Act, “policy of marine insurance” means a policy within the meaning of the Marine Insurance Act (Cap. 390).

(2)

Where a person, in consideration of a sum of money paid or to be paid for additional freight or otherwise, agrees to take up himself any risk attending goods, merchandise or property of any description whatever while on board of any ship or vessel or engages to indemnify the owner of any such goods, merchandise or property from any risk, loss or damage, the agreement or engagement shall be deemed to be a contract of marine insurance.

74.

Repealed by Act No. 54 of 1968, s. 94.

76.
Policy for voyage and time chargeable with two duties

Where any marine insurance is made for or upon a voyage and also for time, or to extend to or cover any time beyond thirty days after the ship shall have arrived at her destination and been there moored at anchor, the policy shall be charged with duty as a policy for or upon a voyage, and also with duty as a policy for time.

77.
No policy valid unless duly stamped

A policy of marine insurance shall not be stamped at any time after it is signed or underwritten by any person, except in the two following cases—

(a)

a policy of mutual insurance having a stamp impressed thereon may, if required, be stamped with an additional stamp provided that at the time when the additional stamp is required the policy has not been signed or underwritten to an amount exceeding the sum or sums which the duty impressed thereon extends to cover; and

(b)

a policy made or executed out of, but being in any manner enforceable within Kenya, may be stamped at any time within ten days after it has been first received in Kenya on payment of the duty only:

Provided that a policy of marine insurance shall, for the purpose of production in evidence, be an instrument which may legally be stamped after the execution thereof, and the penalty payable on stamping it shall be two thousand shillings.

78.
Stamping of policies of marine insurance which are subject to a contingent increase of premium
(1)

Where the premium or consideration for a policy of marine insurance is expressed to be a sum not exceeding the rate of two shillings and fifty cents per centum of the sum insured, and is subject to an increase (whether defined or not in the policy) in the event of the occurrence of a specified contingency, the premium or consideration shall, for the purposes of this Act, be treated as a premium or consideration not exceeding the rate of two shillings and fifty cents per centum on the sum insured.

(2)

If, owing to the occurrence of the contingency which is the occasion for an increase of the premium or consideration, the premium or consideration is increased so as to exceed the rate of two shillings and fifty cents per centum of the sum insured, the policy or a new policy to be thereupon issued shall be stamped with such an additional sum as is required to represent the additional duty payable, and may be so stamped without penalty at any time not exceeding thirty days after the date on which the increased premium or consideration becomes ascertained.

79.
Legal alterations in policies may be made under certain restrictions

Nothing in this Act shall prohibit the making of any alteration which may lawfully be made in the terms and conditions of any policy of marine insurance after the policy has been underwritten, provided that the alteration is made before notice of the determination of the risk originally insured, and that it does not prolong the time covered by the insurance thereby made beyond the period of six months in the case of a policy made for a less period than six months, or beyond the period of twelve months in the case of a policy made for a greater period than six months, and that the articles insured remain the property of the same person or persons, and that no additional or further sum is insured by reason or means of the alteration.

80.
Stamping of policies of insurance on ships under construction, etc.

A policy of insurance made or purporting to be made upon or to cover any ship or vessel, or the machinery or fittings belonging to the ship or vessel, whilst under construction or repair or on trial, shall be sufficiently stamped for the purposes of this Act, if stamped as a policy of marine insurance made for a voyage, and, though made for a time exceeding twelve months, shall not be deemed to be a policy of marine insurance made for time.

82A.
Payment of stamp for “policy of life insurance” and “policy of insurance against accident”

For purposes of this Act, the stamp duty payable for "policy of life insurance" and "policy of insurance against accident" shall be payable monthly as an aggregate of all policies issued within the month.

83.
Employer’s indemnity insurance

The provisions of section 82 in reference to the expression “policy of insurance against accident” shall extend to and include policies of insurance or indemnity against liability incurred by employers in consequence of claims made upon them by workmen who have sustained personal injury when the annual premium on those policies does not exceed forty shillings.

85.
Assignment of policy of life insurance to be stamped before payment of money assured
(1)

No assignment of a policy of life insurance shall confer on the assignee therein named, or his executors, administrators or assigns, any right to sue for the money assured or secured thereby, or to give a valid discharge therefor, or any part thereof, unless the assignment is duly stamped, and no payment shall be made to any person claiming under any such assignment unless it is duly stamped.

(2)

If any payment is made in contravention of this section, the duty not paid upon the assignment, together with the penalty payable on stamping the same, shall be a debt due to the Government from the person by whom the payment is made.

Receipts
87.
Certain forms of receipts not dutiable

Neither the name of a banker (whether accompanied by words of receipt or not) within the ordinary course of his business as a banker upon a bill of exchange, cheque or promissory note duly stamped, nor the name of a payee written upon a draft or order, if payable to order, shall constitute a receipt chargeable with duty.

Settlements
89.
As to settlement of policy or security

Where any money which may become due or payable upon a policy of life insurance, or upon a security, not being a marketable security, is settled or agreed to be settled, the instrument whereby the settlement is made or agreed to be made shall be charged with ad valorem duty in respect of that money:

Provided that—

(i) where, in the case of a policy, no provision is made for keeping up the policy, the ad valorem duty shall be charged only on the value of the policy at the date of the instrument;
(ii) if in any such case the instrument contains a statement of the value and is stamped in accordance with the statement, it shall, so far as regards the policy, be deemed to be duly stamped, unless or until it is shown that the statement is untrue, and that the instrument is in fact insufficiently stamped.
90.
Settlements, when not to be charged as securities

An instrument chargeable with ad valorem duty as a settlement in respect of any money, stock or security shall not be charged with any further duty by reason of containing provision for the payment or transfer of the money, stock or security, or by reason of containing, where the money, stock or security is in reversion or is not paid or transferred upon the execution of the instrument, provision for the payment by the person entitled in possession to the interest or dividends of the money, stock or security during the continuance of the possession of any annuity or yearly sum not exceeding interest at the rate of four per centum per annum upon the amount or value of the money, stock or security.

Share Warrants
Stock Certificates to Bearer
93.
Meaning of “stock certificate to bearer”

For the purposes of this Act, “stock certificate to bearer” includes a stock certificate to bearer issued after the commencement of this Act under the Companies Act (Cap. 486) or any other written law authorizing the creation of debenture stock, corporation stock, municipal stock or funded debt by whatever name known, and also includes an instrument to bearer issued by or on behalf of any company or body of persons formed or established in Kenya and having the same effect as a stock certificate to bearer.

PART IV – RELIEF FROM STAMP DUTY IN CERTAIN CASES
95.
Reconstruction or amalgamation of companies
(1)

If in connexion with a scheme for the reconstruction of a company or companies or the amalgamation of any companies it is shown to the satisfaction of a collector that there exist the following conditions—

(a)

that a company with limited liability is to be registered, or that since 29th September, 1951, a company has been incorporated by Letters Patent or Act of the United Kingdom Parliament, or under an Act of Kenya, or the nominal share capital of a company has been increased;

(b)

that the company (in this section referred to as the transferee company) is to be registered or has been incorporated or has increased its capital with a view to the acquisition either of the undertaking of, or of not less than ninety per centum of the issued share capital of, any particular existing company;

(c)

that the consideration for the acquisition (except such part thereof as consists in the transfer to or discharge by the transferee company of liabilities of the existing company) consists as to not less than ninety per centum thereof—

(i) where an undertaking is to be acquired, in the issue of shares in the transferee company to the existing company or to holders of shares in the existing company; or
(ii) where shares are to be acquired, in the issue of shares in the transferee company to the holders of shares in the existing company in exchange for the shares held by them in the existing company;

then to the provisions of subsection (2) shall apply.

(2)

If the collector is satisfied as to the conditions set out in subsection (1) then, subject to the further provisions of this section—

(a)

the nominal share capital of the transferee company, or the amount by which the capital of the transferee company has been increased, as the case may be, shall, for the purpose of computing the stamp duty chargeable in respect of that capital, be treated as being reduced by either—

(i) an amount equal to the amount of the share capital of the existing company, or, in the case of the acquisition of a part of an undertaking, equal to such proportion of the share capital as the value of that part of the undertaking bears to the whole value of the undertaking; or
(ii) the amount to be credited as paid up on the shares to be issued as consideration and on the shares, if any, to be issued to creditors of the existing company in consideration of the release of debts (whether secured or unsecured) due or accruing due to them from the existing company or of the assignment of those debts to the transferee company,

whichever amount is the less; and

(b)

stamp duty under the heading Conveyance or Transfer on sale in the Schedule shall not be chargeable on any instrument made for the purposes of, or in connexion with, the transfer of the undertaking or shares or on any instrument made for the purposes of, or in connexion with, the assignment to the transferee company of any debts, secured or unsecured, of the existing company, nor shall any such duty be chargeable on any instrument vesting, or relating to the vesting of, the undertaking or shares in the transferee company.

(3)

No instrument referred to in paragraph (b) of subsection (2) shall be deemed to be duly stamped unless—

(a)

it is stamped with the duty to which it would, but for this section, be liable; or

(b)

it has, in accordance with the provisions of section 17, been stamped with a particular stamp denoting that—

(i) it is not chargeable with any duty; or
(ii) it is duly stamped,

but where, by reason of this subsection, a fee has been paid under section 17 in respect of the stamping of such an instrument, no fee shall be payable under that section in respect of the stamping of any further instrument of transfer or assignment between the existing company and the transferee company where the conditions under which that further transfer or assignment takes place are those under which the transfer or assignment in respect of which the fee was paid took place.

(4)

In the case of an instrument made for the purposes of, or in connexion with, a transfer to a company within the meaning of the Companies Act (Cap. 486), the provisions of paragraph (b) of subsection (2) shall not apply unless the instrument is either—

(a)

executed within a period of twelve months from the date of the registration of the transferee company or the date of the resolution for the increase of the nominal share capital of the transferee company, as the case may be; or

(b)

made for the purpose of effecting a conveyance or transfer in pursuance of an agreement which has been filed, or particulars of which have been filed, with the Registrar of Companies within that period of twelve months.

(5)

The provisions of this section with respect to the release and assignment of debts of the existing company shall not, except in the case of debts due to banks or to trade creditors, apply to debts which were incurred less than two years before the proper time for making a claim for exemption under this section.

(6)

For the purposes of a claim for exemption under paragraph (b) of subsection (2), a company which has, in connexion with a scheme of reconstruction or amalgamation, issued any unissued share capital shall be treated as if it had increased its nominal share capital.

(7)

A company shall not be deemed to be a particular existing company within the meaning of this section unless it is provided by the memorandum of association of, or the Letters Patent, Act of the United Kingdom Parliament or Act of Kenya incorporating, the transferee company that one of the objects for which the company is established is the acquisition of the undertaking of, or shares in, the existing company, or unless it appears from the resolution, Act of the United Kingdom Parliament, Act of Kenya or other authority for the increase of the capital of the transferee company that the increase is authorized for the purpose of acquiring the undertaking of, or shares in, the existing company.

(8)

In a case where the undertakings of or shares in two or more companies are to be acquired, the amount of the reduction to be allowed under this section in respect of the stamp duty chargeable in respect of the nominal share capital or the increase of the capital of a company shall be computed separately in relation to each of those companies.

(9)

Where a claim is made for exemption under this section, the collector may require the delivery to him of a statutory declaration in such form as he may direct, made by an advocate, and of such further evidence, if any, as the collector may reasonably require.

(10)

If—

(a)

where any claim for exemption from duty under this section has been allowed, it is subsequently found that any declaration or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions specified in subsection (1) are not fulfilled in the reconstruction or amalgamation as actually carried out; or

(b)

where shares in the transferee company have been issued to the existing company in consideration of the acquisition, the existing company within a period of two years from the date, as the case may be, of the registration or incorporation, or of the authority for the increase of the capital, of the transferee company ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so issued to it; or

(c)

where any such exemption has been allowed in connexion with the acquisition by the transferee company of shares in another company, the transferee company within a period of two years from the date of its registration or incorporation or of the authority for the increase of its capital, as the case may be, ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so acquired,

the exemption shall be deemed not to have been allowed and an amount equal to the duty remitted shall become payable forthwith, and shall be recoverable from the transferee company as a debt due to the Government, together with interest thereon at the rate of five per centum per annum in the case of duty remitted under paragraph (a) of subsection (2) from the date of the registration of incorporation of the transferee company or the increase of its capital, as the case may be, and, inthe case of duty remitted under paragraph (b) of subsection (2), from the date on which it would have become chargeable if the Stamp (Amendment) Ordinance, 1951 (No. 58 of 1951) (now repealed) had not been enacted.

(11)

If in the case of any scheme of reconstruction or amalgamation the collector is satisfied that at the proper time for making a claim for exemption from duty under subsection (1) there were in existence all the necessary conditions for the exemption other than the condition that not less than ninety per centum of the issued share capital of the existing company would be acquired by the transferee company, the collector may, if it is proved to his satisfaction that not less than ninety per centum of the issued capital of the existing company has under the scheme been acquired within a period of six months from the earlier of the two following dates, that is to say—

(a)

the last day of the period of thirty days after the first allotment of shares made for the purposes of the acquisition; or

(b)

the date on which an invitation was issued to the shareholders of the existing company to accept shares in the transferee company,

and on production of the instrument on which duty paid has been impressed, direct repayment to be made of such an amount of duty as would have been remitted if that condition had been originally fulfilled.

(12)

In this section, except where the context otherwise requires—

(a)

references to the undertaking of an existing company include references to a part of the undertaking of an existing company;

(b)

“shares” includes stock.

[Act No. 5 of 1960, s. 6, L.N. 236/1964, Sch.]

96.
Transfers between associated companies
(1)

Stamp duty under the heading Conveyance or Transfer on sale in the Schedule shall not be chargeable on an instrument to which this section applies.

(2)

No instrument to which this section applies shall be deemed to be duly stamped unless—

(a)

it is stamped with the duty to which it would, but for this section, be liable; or

(b)

it has, in accordance with the provisions of section 17, been stamped with a particular stamp denoting—

(i) that it is not chargeable with any duty; or
(ii) that it is duly stamped,

but, where, by reason of this subsection, a fee has been paid under section 17 in respect of the stamping of such an instrument, no fee shall be payable under that section in respect of the stamping of any further instrument of conveyance or transfer between the same companies where the conditions under which that further conveyance or transfer takes place are those under which the conveyance or transfer in respect of which the fee was paid took place.

(3)

This section shall apply to any instrument as respects which it is shown to the satisfaction of the collector—

(a)

that the effect thereof is to convey or transfer a beneficial interest in property from one company with limited liability (hereinafter called the

transferor) to another such company (hereinafter called the transferee); and

(b)

that either—

(i) one of such companies is beneficial owner of not less than ninety per centum of the issued share capital of the other company; or
(ii) not less than ninety per centum of the issued share capital of each of the companies is in the beneficial ownership of a third company with limited liability; and
(c)

that the instrument was not executed in pursuance of or in connexion with an arrangement whereunder—

(i) the consideration for the conveyance or transfer was to be provided directly or indirectly by a person other than a company which at the time of the execution of the instrument was associated with either the transferor or the transferee; or
(ii) the beneficial interest in the property was previously conveyed or transferred directly or indirectly by such a person. [Act No. 5 of 1960, s. 7.]
96A.
Exemption of stamp duty on the transfers relating to real estate investment trust
(1)

This section applies only to real estate investments trusts authorized under the Capital Markets Act (Cap. 485 A), in respect of which it is shown to the collector —

(a)

that the effect thereof is to convey or transfer a beneficial interest in property from one trustee to another trustee or to an additional trustee; or

(b)

that the effect thereof is to convey or transfer a beneficial interest in property from a person or persons for the transfer of units in the real estate investment trust.

(2)

No Stamp duty shall be chargeable on an instrument relating to the matters referred to in subsection (1).

(3)

An instrument to which this section applies shall be deemed to be duly stamped where it has, in accordance with the provisions of section 17, stamped with the particular stamp denoting that it is not chargeable with any duty.

(4)

The exemption for instruments to which paragraph (1)(b) applies shall only have effect in respect of instruments executed before the 31st December, 2022.

(5)

For the purposes of this section—

“additional trustee” means a new trustee appointed to an existing real estate investment trust.

“trustee” means a person appointed under a trust deed as a trustee of a real estate investment trust or otherwise so appointed by the court or pursuant to regulations made under the Capital Markets Act (Cap. 485A).

96B.
Exemption from payment of stamp duty on transfer of title relating to Sukuk arrangement
(1)

A Sukuk arrangement shall be exempt from stamp duty where the arrangement requires the transfer of title in an asset if—

(a)

at the beginning of the arrangement, the title shall be transferred from the original owner of the asset to the entity representing the interests of the Sukuk holders; and

(b)

during or at the end of the arrangement, the title shall be transferred back to the original owner of the asset from the entity representing the interests of the Sukuk holders.

(2)

An exemption under subsection (1) shall also apply if the asset is replaced during the term of the Sukuk arrangement:

Provided that the conditions specified in subsection (1) (a) and (b) are satisfied.

(3)

An arrangement shall not be exempt from stamp duty if—

(a)

the title to the asset is transferred during or after the Sukuk arrangement to any party other than the original owner;

(b)

the arrangement is not effected for genuine commercial reasons; or

(c)

the arrangement forms part of arrangements whose main purpose is the evasion of a tax liability under any tax law.

97.
Exemption of building societies’ documents from stamp duty

Notwithstanding anything contained in this Act, no rules of a building society registered under the Building Societies Act (Cap. 489) (hereinafter referred to as a building society), nor any copy thereof nor any receipt, nor any entry in any book of receipt for money deposited in the funds of a building society, or for any money received by any member, or his executors, administrators, assigns or attorneys, from the funds of a building society, nor any transfer of any share, nor any bond or other security to be given to or on account of a building society, or by any officer thereof, nor any order on any officer for payment of money to any member, nor any appointment of any agent, nor any certificate or other instrument for the revocation of any such appointment, nor any other instrument or document whatever required or authorized to be given, issued, signed, made or produced in pursuance of the Building Societies Act (Cap. 489), or of the rules of a building society, shall be subject or liable to or charged with any stamp duty or duties whatsoever:

Provided that this exemption shall not extend to a mortgage, nor to the release or discharge of a mortgage.

PART V – ALLOWANCES FOR STAMPS IN CERTAIN CASES
98.
Allowance for spoiled stamps

Subject to the provisions of section 99, and of any regulations made under this Act, and to the production of such evidence by statutory declaration or otherwise as the collector may require, allowance shall be made by a collector for stamps spoiled in the following cases—

(a)

the stamp on any material inadvertently and undesignedly spoiled, obliterated or by any means rendered unfit for the purpose intended, before the material bears the signature of any person or any instrument written thereon is executed by any party;

(b)

any adhesive stamp which has been inadvertently and undesignedly spoiled or rendered unfit for use and has not in the opinion of the collector been affixed to any material;

(c)

any adhesive stamp representing a fee capable of being collected by means of that stamp which has been affixed to material;

(d)

the stamp on any bill of exchange signed by or on behalf of the drawer which has not been accepted or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptance;

(e)

the stamp on a promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands;

(f)

the stamp on a bill of exchange or promissory note which from any omission or error has been spoiled or rendered useless, although, being a bill of exchange, it may have been accepted or endorsed or, being a promissory note, it may have been delivered to the payee, provided that another completed and duly stamped bill of exchange or promissory note is produced identical in every particular, except in the correction of the error or omission, with the spoiled bill or note;

(g)

the stamp used for an instrument executed by any party thereto—

(i) but afterwards found to be absolutely void from the beginning;
(ii) but afterwards found unfit, by reason of any error or mistake therein, for the purpose originally intended;
(iii) which has not been made use of for any purpose whatever and which, by reason of the inability or refusal of some necessary party to sign it or to complete the transaction according to the instrument, is incomplete and insufficient for the purpose for which it was intended;
(iv) which by reason of the refusal of any person to act under it, or for want of enrolment or registration within the time required by law, fails of its intended purpose or becomes void;
(v) which is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is executed and duly stamped, or which becomes useless in consequence of the transaction intended to be thereby effected being effected by some other instrument duly stamped. [Act No. 5 of 1960, s. 8.]
100.
Allowance for misused stamps

Where a person has inadvertently used for an instrument liable to duty a stamp of sufficient amount but of improper description, or a stamp of greater value than was necessary, or has inadvertently used a stamp for an instrument not liable to any duty, a collector may, on application made within one year after the date of the instrument, or, if it is not dated, within six months after the execution thereof by the person by whom it was first or alone executed, and upon the instrument, if liable to duty, being stamped with the proper duty, and subject to the provisions of section 21, cancel and allow as spoiled the stamp so misused.

PART VI – MISCELLANEOUS
103.
As to discontinuance of dies

Whenever the Senior Collector of Stamp Duties determines to discontinue the use of any die and provides a new die to be used in lieu thereof and gives public notice thereof in the Gazette, then from and after any day to be stated in the notice (that day not being within one month after the notice is so published) the new die shall be the only lawful die for denoting the duty chargeable in any case in which the discontinued die would have been used; and any instrument first executed by a person or bearing date after the day so stated and stamped with the discontinued die shall be deemed, subject to subsections (2) and (3), to be not duly stamped.

(2)

If any instrument stamped with the discontinued die, and first executed after the day so stated at any place outside Kenya, is brought to a collector within fourteen days after it has been received in Kenya, then upon proof of the facts to the satisfaction of the collector the stamp thereon shall be cancelled and the instrument shall be stamped with the same amount of duty by means of the lawful die, without payment of any penalty.

(3)

Any person having in his possession any material stamped with the discontinued die, and which by reason of the providing of the new die has been rendered useless, may, at any time within six months after the day stated in the notice, send it to the collector, who may thereupon cause the stamp on that material to be cancelled and the same material, or if the collector thinks fit any other material, to be stamped with the new die, in lieu of and to an equal amount with the stamp so cancelled.

104.
Conditions and agreements as to duty void

Any condition of sale framed with the view to precluding objection or requisition upon the ground of absence or insufficiency of stamp upon any instrument executed after the commencement of this Act, and any contract, arrangement, or undertaking for assuming the liability on account of absence or insufficiency of stamp upon any such instrument or indemnifying against that liability, absence or insufficiency, shall be void.

105.
Compounding duty on cheques
(1)

The Senior Collector of Stamp Duties may enter into an agreement with any banker for the composition of the stamp duty on unstamped cheques on the following conditions—

(a)

that the cheques shall be drawn and issued on forms to be supplied or adopted by the banker;

(b)

that the banker shall levy upon or charge to the person to whom the cheques are issued the stamp duty mentioned in the Schedule;

(c)

that the banker shall pay on or before the last day of each month to the Senior Collector of Stamp Duties the amount due and collected thereon as duties on the unstamped cheques issued during the immediately preceding month, and shall render with each payment an account is such form as the Senior Collector of Stamp Duties may require;

(d)

that the banker shall deposit with the Senior Collector of Stamp Duties, as security for the due payment of any moneys payable under paragraph (c), such sum (if any) as the Senior Collector of Stamp Duties may direct.

(2)

Cheques drawn and issued on forms supplied or adopted by the bank in accordance with this section shall be deemed to be duly stamped.

107.
Registers, books, etc., to be open to inspection

Any officer or servant of a public body having in his custody any registers, books, records, papers, documents or proceedings, the inspection whereof may tend to secure any duty, or to prove or lead to the discovery of any fraud or omission in relation to any duty, shall at all reasonable times permit any person thereto authorized by a collector to inspect the registers, books, records, papers, documents and proceedings, and to take such notes and extracts as he may deem necessary, without fee or reward, and in case of refusal shall be guilty of an offence and liable to a fine not exceeding five hundred shillings.

108.
Penalty for enrolling, etc., instrument not duly stamped

If any person, whose office it is to enrol, register or enter in or upon any rolls, books or records any instrument chargeable with duty, enrols, registers or enters any such instrument not being duly stamped, he shall be guilty of an offence and liable to a fine not exceeding five hundred shillings.

109.
Responsibility for loss of or damage to instrument
(1)

If any instrument sent to a collector under subsection (3) of section 19 is lost, destroyed or damaged during transmission, the person sending it shall not be liable for the loss, destruction or damage.

(2)

When any instrument is about to be sent, the person from whose possession it came into the hands of the person impounding it may require a copy thereof to be made at the expense of the first mentioned person and authenticated by the person impounding the instrument:

Provided that in the event of the loss, destruction or damage of the original instrument the authenticated copy shall be admissible in evidence in any court, but the copy shall be chargeable with duty and penalty as if it were the original.

110.
Collector may administer oaths

A Collector may administer any oath or affirmation which may be necessary for the purposes of this Act.

PART VII – CRIMINAL OFFENCES AND PROCEDURE
PART VIII – GENERAL