On inland bills payable on demand, or at sight, or on presentation, or not exceeding three days after sight or date, and on cheques, the penny stamp may be either impressed or adhesive. In the case of inland bills payable otherwise, the stamp must be impressed. An adhesive stamp must be properly cancelled by the person signing the bill. (See Section 38 below.) On foreign bills, the duties are to be denoted by adhesive foreign bill stamps.
If a bill drawn abroad is impressed with an English stamp it is not sufficient ; it must have the correct adhesive stamp affixed. If the bill is payable on demand, or not exceeding three days after date or sight, an ordinary penny postage stamp may be used. Any person into whose hands any such bill comes before it is stamped, must affix the proper stamp before dealing with the bill in any way. (See Section 35, below.) Where the bill is drawn in foreign money, the amount, for the purposes of stamping, is calculated according to the rate of exchange current on the date of the bill, unless the rate is stated in the bill.
Interest upon a bill or note is not taken into account in calculating the amount of stamp duty. The duty is payable only upon the amount of the bill or note.
As to the duties upon promissory notes, see PROMISSORY NOTE.
The following sections are from the Stamp Act, 1891 (54 LS: 55 Viet. c. 39) : " 32. For the purposes of this Act the expression ' bill of exchange ' includes draft, order, cheque, and letter of credit, and any document or writing (except a bank note) 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 the expression ' bill of ex change 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, 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 the same 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. (1) For the purposes of this Act the expression ' promissory note ' includes any document or writing )except a bank note) containing a promise to pay any sum of money. 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, is to be deemed a promissory note for that sum of money.
) The fixed duty of one penny on a bill of exchange payable on demand or at sight or on presentation may be denoted by an adhesive stamp, which, where the bill is drawn in the United Kingdom, is to be cancelled by the person by whom the bill is signed before he delivers it out of his hands, custody, or power.
The ,id alorem duties upon bills of exchange and promissory notes drawn or made out of the UniteI Kingdom are to be denoted by adhesive stamps.
(1) Every person into whose hands any bill of exchange or promissory note drawn or made out of the United Kingdom. comes in the United Kingdom before it is stamped shall, before he presents for payment, or indorses, transfers, or in any manner negotiates, or pays the bill or note, affix thereto a proper adhe sive stamp or proper adhesive stamps of sufficient amount, and cancel every stamp so affixed thereto. Provided as follows : (a) If at the time when any such bill or note comes into the hands of any band fide holder there is affixed thereto an adhesive stamp effectu ally 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 ; b) If at the time when any such bill or note comes into the hands of any bond fide holder there is affixed there to an adhesive stamp not duly cancelled. it shall be competent for the holder to 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 duly stamped, and as valid and available as if the stamp had been cancelled by the person by whom it was affixed.