Property Transfer Tax (“PTT”) is payable on the transfer of shares and real estate, including leasehold interests of 25 years and more. Such PTT is payable by the vendor on the amount or the value of the consideration paid in respect of the transfer. The rate of PTT applicable to such transfers is 2.5%. However, there are tax-free thresholds applicable in some cases. For example, no PTT is payable on the first BB$50,000 of consideration paid in respect of the sale of shares. Also, no PTT is payable on the first BB$150,000 paid in respect of land and buildings. However, it should be noted that no tax-free threshold exists in respect of the sale of land only.
Certain share transfers are exempt from PTT. In particular, shares traded on the Barbados Securities Exchange are exempt from PTT. In addition, transfers of shares involving no change of beneficial ownership are exempt from PTT if the beneficial ownership does not change within five years after the original transfer.
Under the Stamp Duty Act, a duty is imposed on instruments executed in Barbados, which relate to any property situated in Barbados or to any matter or thing done or to be done in Barbados. The duty payable on each specific type of instrument is outlined in the Schedule to the Act. For example, generally stamp duty at the rate of approximately 1% is applied to instruments executing the sale of real estate. An assignment of real or personal property will attract a stamp duty of 1 and 3/5 of 1%.
It should be noted that recent proposed amendments to the PTT and Stamp Duty Acts provide for an exemption from PTT and stamp duty in respect of the transfer of shares to a non-resident of Barbados. This exemption applies only where the assets of the company consist of foreign assets, including investments comprising shares and securities in foreign companies, and where the income of the company is derived solely from sources outside of Barbados. For this purpose, an individual is considered a non-resident of Barbados where he is ordinarily resident outside of Barbados and a company is resident outside of Barbados where it is controlled by persons who are not ordinarily resident in Barbados.