Stamp Duty Act

This Act may be cited as the Stamp Duty Act.

Section 2 provides definitions of terms used in the Act, including "collector", "consideration", "instrument", "Islamic property finance", "stamp", "stock", "Sukuk" and others.

The Act applies to all stamp duties and to all fees and penalties payable or receivable by means of stamps under any written law.

The collector may appoint officers to collect stamp duty.

Persons who execute or prepare instruments must fully and truly set out the facts and circumstances; failing to do so is an offence punishable by a fine not exceeding one hundred thousand shillings. The collector may require evidence and summon persons to give that evidence; summoned persons are legally bound to appear, answer and produce documents.

The Collector of Stamp Duties must refer conveyances or transfers of immovable property to the Chief Government Valuer (or a registered valuer appointed by them) for valuation; the Collector must demand payment of any additional stamp duty by written notice and the purchaser/transferee must pay within twenty-one days; the Collector must register caveats or restrictions where additional duty is due; the section also applies to certain gifts and partitions.

Provides rules for calculating ad valorem stamp duty for instruments involving foreign currency or securities, prescribes using a rate of exchange set by regulations when applicable, and deems instruments stamped according to a stated current rate of exchange or average price to be duly stamped unless that statement is shown to be untrue.

Instruments to be in English.

Adhesive stamps used to denote stamp duty must be cancelled so they cannot be reused; specified persons must cancel stamps in particular situations; failure to cancel is an offence punishable by a fine up to five thousand shillings.

Anyone must not deface an adhesive stamp before it is used for stamp duty; doing so is an offence punishable by a fine not exceeding two thousand shillings. Writing on or otherwise appropriating a stamp before use is permitted only with the express sanction of the Senior Collector of Stamp Duties and in conformity with prescribed conditions.

Section 15. Penalty for frauds in relation to adhesive stamps

Denoting stamps

Section 17 gives the collector the power to require abstracts and evidence, and requires the collector to assess the duty chargeable on instruments and stamp them accordingly; it also provides that instruments stamped as not chargeable or duly stamped are admissible in evidence.

Persons dissatisfied with a collector's assessment may appeal to the High Court within thirty days, subject to payment or security; the collector must state and sign a case; the court shall determine and may order repayment or costs.

Instruments chargeable with stamp duty cannot be filed, enrolled, registered or acted upon by any person unless duly stamped; courts and similar bodies may admit unstamped instruments in evidence only upon payment of unpaid duty and a penalty; certain persons may require production of originals; a penalty is specified for stamping late.

Collector may remit a penalty up to one million five hundred shillings; remittances above that require prior Cabinet Secretary approval; applicants dissatisfied with the collector may refer to the Cabinet Secretary; collector and Cabinet Secretary may require sworn or other evidence.

If an instrument has a stamp of sufficient amount but the wrong description, it may be certified as duly stamped after payment of the duty and a penalty of ten shillings, and then is deemed duly stamped.

An unstamped or improperly stamped bill of exchange presented, accepted, or payable outside Kenya, or a cheque presented, accepted, or payable inside or outside Kenya, is not invalid solely for lack of stamping and may be received in evidence if the proper duty and penalties (sections 19 and 20) are paid.

Applies to instruments executed outside Kenya.

The Senior Collector of Stamp Duties may refund a duty or penalty paid if satisfied the instrument was erroneously assessed and an application is made within one year of payment.

Persons must not execute more instruments than are ordinarily necessary to carry out a transaction in order to evade stamp duty; where a prescribed scale increases duty beyond limits, the same restriction applies; and the person asserting no splitting bears the onus of proof.

Anyone who executes an instrument in contravention of section 25 is guilty of an offence and liable to a fine not exceeding fifty thousand shillings.

If an instrument expressly makes interest or an Islamic finance return payable, the instrument must not be charged a higher duty than it would have been charged if interest or Islamic finance return had not been mentioned.

If an owner learns an instrument is insufficiently stamped and brings it with that information to a collector within twenty-one days of receipt, the owner may have it stamped without penalty for the proper additional sum.

Collectors may recover stamp duties, penalties and related sums as a civil debt; the Senior Collector and authorized persons have powers to recover deficiencies and require police presence; goods distrained are kept for ten days at the cost of the person from whom duty is recoverable and police officers required to attend must comply.

Instruments specified in the Schedule that relate to property or matters in Kenya are chargeable with the stamp duty specified in the Schedule; subject to exemptions and other written law. The Government must not charge stamp duty twice when a person moves a mortgage or an Islamic property finance arrangement from one bank to another.

Instruments chargeable with stamp duty must be stamped within 30 days of execution (or within 30 days of receipt in Kenya if first executed abroad), except where a collector's opinion under section 17 has been sought; instruments specified to be stamped before execution must be stamped by any party thereto; persons specified as liable for stamping are liable to pay the duty, and persons responsible for stamping may be guilty of an offence and liable to a fine not exceeding two thousand shillings.

All duties chargeable on instruments must be paid and the payment must be shown on the instruments by means of stamps in the manner that may be prescribed.

Instruments written on stamped material must be stamped so the stamp appears on the face and cannot be applied to any other instrument on the same material; if multiple instruments are written on the same material, each must be separately and distinctly stamped with its chargeable duty.

Instruments that cover multiple distinct matters or multiple considerations must be charged separately for duty for each matter or consideration.

Certain instruments executed under hand only that are given as security (including deposit of share warrants, stock certificates, bearer instruments, or other transferable securities) are to be treated as agreements and charged with stamp duty.

Section 31 deleted by ActNo. 13 of 2017, Sch.

Defines "bill of exchange" as an order for payment by a bill of exchange or promissory note, or for delivery of such a bill or note in satisfaction of a sum, or for payment out of a particular fund, or upon a condition or contingency.

Defines "promissory note" to include any document or writing promising to pay any sum of money and treats conditional or fund‑based promises as promissory notes for that sum.

If a bona fide holder receives a bill or note with an adhesive stamp effectively cancelled, it is treated as duly cancelled; if the stamp is not duly cancelled the bona fide holder may cancel it and the instrument is then deemed duly stamped; subsection (2) preserves liability for fines or penalties for not cancelling a stamp.

A bill of exchange or promissory note that purports to be drawn or made outside Kenya is to be treated as if drawn or made abroad for deciding how stamp duty is to be indicated, even if it was actually drawn or made within Kenya.

Issuing, endorsing, transferring, negotiating, presenting for payment or paying a bill of exchange or promissory note liable to duty without the required stamp is an offence punishable by a fine up to five thousand shillings; recipients of such unstamped instruments cannot recover on them, but a person presented with certain unstamped bills may affix a two shillings fifty cents adhesive stamp and cancel it and then pay and charge or deduct the duty, whereupon the bill is valid as to duty. Subsection (2) preserves liability for fines.

Only one bill in a set needs to be stamped.

Section 38 deleted by ActNo. 13 of 2017, Sch.

Charge of duty on capital of companies

Defines "contract note" for the Act and excludes notes where the principal is acting as broker or agent for a principal.

Persons effecting sales or purchases of stock or marketable securities as brokers, agents, or principals must forthwith make and execute a contract note and transmit it to the principal or vendor/purchaser; failure is an offence liable to a fine not exceeding ten thousand shillings. Unstamped contract notes chargeable with duty also attract the same penalty. Brokers or agents who fail to comply lose any legal claim to brokerage, commission or agency charges.

Contract-note provisions apply to option contracts, but duty on such option contracts or related contract notes is one-half of the usual charge; double options are treated as separate contracts; contract notes made on exercise of a duly stamped option are charged one-half the duty if they bear a broker/agent certificate.

Defines "conveyance on sale" and requires vesting orders by the court to bear the same stamp as a conveyance on sale.

If the consideration for a conveyance on sale includes stock or a marketable security, the conveyance is charged ad valorem duty on the value of that stock or security; if the consideration includes a non-marketable security, the conveyance is charged ad valorem duty on the amount due for principal and interest on its date.

Where consideration for a conveyance on sale is payable periodically, the conveyance must be charged ad valorem duty according to specified time-based rules; special rules apply for payments for up to 20 years, exceeding 20 years or in perpetuity, payments during lives, and securing-payment instruments.

A conveyance on sale that includes further consideration for the purchaser’s covenant or for substantial improvements or covenants relating to the subject matter is not chargeable with duty in respect of that further consideration.

If property is conveyed in whole or in part for a debt, or is subject to payment or transfer of money or stock, that debt, money or stock is treated as the whole or part of the consideration for which the conveyance is liable to ad valorem duty.

When property contracted for sale as one consideration is conveyed in separate parts, the parties must apportion and state a distinct consideration for each part; separate conveyances are charged ad valorem duty on the distinct consideration; where multiple instruments complete a transaction the principal instrument bears ad valorem duty and the others pay five shillings; conveyances via intermediaries are treated as successive conveyances and must recite the intermediary chain, and executing an instrument without that recital while knowing it is omitted is an offence punishable by a fine up to fifty thousand shillings.

Certain agreements for the sale of an estate or interest (with listed exceptions) must bear the same ad valorem duty as a conveyance of the property; fixed duties of one thousand or one hundred shillings apply in some cases, ad valorem duty already paid may be returned if the agreement is rescinded, and conveyances presented within six months may be stamped accordingly.

If a sold annuity or similar right is not created by an actual grant or conveyance but is secured by a bond or similar instrument, that bond or instrument must be treated as charged with the same duty as an actual grant or conveyance and deemed an instrument of conveyance on sale; separately, a grant or contract for payment of a "purchased life annuity" is chargeable with stamp duty under the Schedule heading specified.

The parties may choose which of several instruments is the principal instrument and may pay the ad valorem duty on it.

A Collector must, without fee, express his opinion under section 17 on conveyances, transfers or agreements referred to in this section; such instruments are not deemed duly stamped unless the Collector has expressed his opinion and the instrument has been stamped accordingly.

Defines what is to be deemed a conveyance on an occasion that is not a sale or a mortgage.

Provision as to duplicates and counterparts

Agreements for a lease or letting are charged the same duty as if they were actual leases for the term and consideration stated; a lease made later in conformity with such a duly stamped agreement is charged five shillings only.

Leases where the consideration is rent must be charged duty according to the Schedule heading "Lease".

Where the consideration for a lease includes any premium or other consideration (other than rent) moving to the lessor or another person, the lease must be charged ad valorem stamp duty computed on that consideration as if it were a conveyance on sale for that amount.

Leases granted in perpetuity are to be charged ad valorem stamp duty, computed on the value of the property.

If rent (or part of it) is payable in produce or goods, the value of that produce or goods is treated as consideration for the lease and is chargeable with ad valorem duty.

Rules for how instruments that increase rent and certain leases are charged with duty, and special rules treating consideration for share transfers as premiums or consideration for leases or assignments.

Leases granted for consideration that the Collector deems inadequate (except government leases) must be charged for that consideration and as if they were voluntary dispositions for the value of the leasehold interest after deducting the consideration.

If the Collector cannot accurately determine the amount of consideration for a lease, he may disregard the unascertainable portion and stamp the lease as a voluntary disposition under section 52, or he may assess a fixed duty of one thousand shillings for the unascertainable portion.

Licences relating to immovable property are treated as leases for the purposes of the Act and are charged with duty; any consideration that would have been rent if the licence were a lease is deemed rent and charged with duty.

Defines "marketable security" to include a security made or issued by or on behalf of any company or body of persons, corporate or unincorporate, formed or established in Kenya.

Persons in Kenya who make, issue, assign, transfer, negotiate or offer for subscription any foreign or Commonwealth government security that is not duly stamped commit an offence and may be fined up to five thousand shillings.

A collector may allow a foreign or Commonwealth government security to be stamped without payment of any penalty.

Defines the meaning of "marketable security transferable on delivery" and "instrument to bearer".

Section 68 defines what is included within "mortgage" (subsection (1)(a)–(e)) and defines "equitable mortgage" (subsection (2)); subsection (3) sets out required certificates to be embodied in equitable mortgages and their discharges and stamping requirements.

Describes an Islamic property finance arrangement where a financial institution provides an Islamic finance arrangement enabling a person to own property or land.

Certain securities (for transfer or re-transfer of stock; for payment of rent charges, annuities or periodical payments; transfers of duly stamped securities; mortgages) are to be charged or not charged with duty in specified ways: securities for transfer/re-transfer of stock are charged the same duty as a similar security for a sum of money equal to the value of the stock; securities for payment of rent charges, annuities or periodical payments are charged the same duty as a similar security for the sum of money concerned; transfers of duly stamped securities and added further charges are not charged by reason of containing additional securities or covenants; a mortgage charged ad valorem is not charged further by reason of conveying or limiting the equity of redemption except to a purchaser or in trust for a purchaser.

A security for future advances is charged for stamp duty according to (a) any stated limitation on the total amount secured, or (b) when unlimited, only to the extent of the ad valorem duty, with excess advances treated as new instruments.

Instruments (and decrees or court orders) that divide co-owned property into separate shares must be charged with duty as a partition.

"Policy of insurance" is defined to include any writing by which a contract of insurance is made, agreed to be made, or evidenced, and "insurance" includes assurance.

Defines "policy of marine insurance" by reference to the Marine Insurance Act (Cap. 390) and states that certain agreements to assume or indemnify risks to goods on board a ship are to be deemed contracts of marine insurance.

Section 74 has been repealed by ActNo. 54 of 1968, s. 94.

A stamp duty of five shillings is charged on a marine insurance policy that contains a continuation clause; if the continuation risk attaches and no new policy is issued the clause is treated as a separate contract and may be stamped without penalty within 30 days after attachment.

If a marine insurance policy covers both a voyage and time (including coverage extending beyond thirty days after arrival and mooring), the policy is charged duty both as a voyage policy and as a time policy.

A policy is not valid unless it is duly stamped.

If a marine insurance premium is stated not to exceed two shillings and fifty cents per centum and is subject to increase on a specified contingency, it is treated as not exceeding that rate; if it increases above that rate the policy (or a new policy) must be stamped for the additional duty and may be stamped without penalty within thirty days after the increased premium is ascertained.

This section allows alterations to the terms and conditions of a marine insurance policy after underwriting, subject to specified restrictions.

A policy of insurance on a ship while under construction, repair, or on trial is treated as sufficiently stamped if it is stamped as a marine voyage policy; even if for more than twelve months, it is not treated as a time policy.

Section 81 makes it an offence to insure or deal in marine insurance unless the insurance is expressed in a duly stamped policy; brokers or agents transacting unstamped business are guilty of an offence, liable to a fine not exceeding fifty thousand shillings and lose legal claims to brokerage; issuing a purported copy when no duly stamped policy exists is also an offence with a similar fine.

Defines "policy of life insurance" and "policy of insurance against accident" and limits duties on accident policies to five shillings or forty shillings.

Stamp duty for life insurance and accident insurance policies must be paid monthly as an aggregate of all policies issued within the month.

The provisions of section 82 are extended to include policies of insurance or indemnity against employers' liability for workmen's personal injury where the annual premium does not exceed forty shillings.

If a person "receives, or takes credit for, any premium or consideration for any insurance" and "does not within three months" "make out and execute a duly stamped policy of insurance", a penalty applies.

Assignments of life insurance policies do not confer enforceable rights or permit payment to claimants unless the assignment is duly stamped; if payment is made contrary to this requirement the unpaid duty and stamping penalty become a debt due to the Government from the person who made the payment.

Defines "receipt" to include notes, memoranda or writings acknowledging money of one hundred shillings or upwards, bills of exchange, cheques or promissory notes of that amount, or acknowledgements/settlements of debts of that amount, whether signed or not.

The text says that the name of a banker on certain stamped instruments, and the name of a payee on a payable-to-order draft or order, do not count as a receipt chargeable with duty.

Persons who receive money, bills, notes or movable property worth one hundred shillings or more must give a duly stamped receipt on demand by the payer or deliverer.

If a policy makes no provision for keeping it up, the ad valorem duty is charged only on the value of the policy at the date of the instrument.

An instrument that is already chargeable with ad valorem duty as a settlement in respect of money, stock or security must not be charged any additional duty for provisions about payment or transfer, except limited interest payments up to four per cent per annum in the specified reversion/non-payment situation.

Duty when settlement made in pursuance of agreement

There is a penalty for issuing a share warrant that is not duly stamped.

Defines "stock certificate to bearer" to include bearer stock certificates issued after commencement under the Companies Act (Cap. 486) or any other written law creating debenture, corporation, municipal stock or funded debt, and instruments to bearer issued by or for companies or bodies formed in Kenya that have the same effect.

Issuing a stock certificate to bearer (or comparable instrument) without a stamp is an offence and is punishable by a fine not exceeding twenty thousand shillings.

Section provides exemption from stamp duty for instruments transferring undertakings or shares in reconstruction or amalgamation where statutory conditions are met, and requires repayment with interest if the exemption was improperly obtained or beneficial ownership changes within specified periods.

Relief: stamp duty is not chargeable on instruments of conveyance or transfer between associated companies when the section's conditions are satisfied.

Certain transfers relating to a real estate investment trust are exempt from stamp duty; instruments covered by subsection (1) are not chargeable and instruments so stamped under section 17 are deemed duly stamped; the exemption for paragraph (1)(b) only applies to instruments executed before 31st December, 2022.

Exemption from payment of stamp duty on transfer of title relating to Sukuk arrangement.

Documents and instruments required or authorized under the Building Societies Act for registered building societies are exempt from stamp duty, except mortgages and the release or discharge of mortgages.

A collector may cancel and treat as spoiled a stamp that was misused if an application is made within the specified time and the instrument is correctly stamped and subject to section 21.

Allowance for spoiled or misused stamps, how to be made

Allowance for stamps not required for use where the stamps were purchased by that person with a bona fide intention to use them

Provides for an allowance for stamps that have been inadvertently spoiled, obliterated or rendered unfit before the material bears signatures or an instrument is executed.

Applications under section 98 will be granted only if made within the specified time limits (ninety days after a stamp is spoiled or becomes useless; for an executed instrument, after its date or, if undated, within two years after execution by the first or sole executor), or within further time the collector allows for instruments sent out of Kenya for execution or where unavoidable circumstances prevent provision of a substituted instrument within that period.

When the Senior Collector discontinues a die and issues a new die with Gazette notice, the new die becomes the only lawful die from the stated day; special rules allow collectors to cancel and re‑stamp certain instruments and allow holders to send obsolete stamped material within six months for replacement.

Conditions of sale and contracts that prevent objections about absence or insufficiency of stamp, or that assume or indemnify liability for unstamped or insufficiently stamped instruments, are void.

Bankers must supply/adopt cheque forms, charge stamp duty to the payee, remit collected duties monthly to the Senior Collector of Stamp Duties with an account, deposit security if directed; cheques on bank-approved forms are deemed duly stamped.

The Cabinet Secretary may, on recommendation and by Gazette notice, exempt instruments or classes of instruments from this Act if satisfied it is in the public interest; but must not exempt instruments for which stamp duty has already been paid and duly stamped.

Officers or servants in custody of public-body records must, at all reasonable times, allow persons authorized by a collector to inspect those records and take notes or extracts without fee; refusal is an offence punishable by a fine not exceeding five hundred shillings.

Persons whose office it is to enrol, register or enter instruments must not enrol instruments that are not duly stamped; if they do they are guilty of an offence and liable to a fine not exceeding five hundred shillings.

If an instrument sent to a collector is lost, destroyed or damaged during transmission, the person who sent it is not liable; the previous possessor may require an authenticated copy to be made at the sender's expense, and that authenticated copy is admissible in court if the original is lost, destroyed or damaged.

The Collector may administer any oath or affirmation necessary for the purposes of this Act.

Anyone who draws or executes a bill of exchange or marine insurance policy that purports to be part of a set but does not, at the same time and on paper duly stamped, draw or execute the whole set commits an offence and may be fined up to one hundred thousand shillings.

Penalty for postdating bills and for other devices to defraud the revenue

Section 113. Penalty for frauds in relation to stamp duties Section 113(1) Any person who practises or is concerned in any fraudulent act, contrivance or device, not specially provided for by any written law, with intent to defraud the

Directors, managers, secretaries and other officers of a corporate body who wilfully cause a default, and certain partners and servants of a firm who wilfully cause a default, shall be guilty of an offence and liable to a fine not exceeding fifty thousand shillings.

A magistrate may issue a search warrant to search persons or premises and inspect and take copies of books or instruments; copies taken are admissible; obstructing such inspection or copying is an offence punishable by a fine not exceeding twenty thousand shillings.

The Senior Collector of Stamp Duties may reward persons who inform of offences or assist recovery of fines, but rewards above ten thousand shillings require the Treasury's consent.

Certain instruments are exempt from stamp duty, including instruments executed by or on behalf of or in favour of the Government; that Government exemption extends to the Community and Corporations within the Community.

Administrative expenses incurred by the Cabinet Secretary (or any other Cabinet Secretary) shall be paid out of moneys provided by Parliament.

Regulations concerning the supply and sale of stamps and stamped papers.

The Cabinet Secretary may, by order published in the Gazette, amend the Schedule.