TION OF STAMPS.) By Section 38, s.s. 1, every person who issues, negotiates or presents for payment or pays any cheque not being stamped, incurs a penalty of /10, and the person who takes such an unstamped cheque shall not be entitled to recover thereon.
By Section 38, s.s. 2, if a cheque is pre sented for payment unstamped, the banker may affix the adhesive stamp of one penny and cancel it, and charge the duty in account against the person by whom the cheque was drawn. or deduct the duty from the amount of the cheque. Besides the drawer, no other person than the banker to whom an un stamped inland cheque is presented for pay ment, has power to stamp it, and it has been held that when stamped by an intermediate holder it could not be recovered on.
Where a formal receipt is given upon a cheque, the receipt requires (under Section 9 of Finance Act, 1895) an adhesive stamp of one penny (or two half-pennies) if for an amount of or upwards. This receipt stamp is in addition to the stamp of one penny upon the cheque.
A cheque is included under the expression " bill of exchange " in the Stamp Act, 1891, and various sections of that Act are given in the article BILL OF EXCHANGE.
If a cheque is drawn in such a form as '• Pay John Brown on July 5 " it must be treated as a bill and stamped with ad va lorem duty. A post-dated cheque requires only the usual penny stamp.
When a customer transfers his account from one branch to another, or from, say, his No. 1 to his No. 2 account, it is usually effected by means of a cheque or stamped letter, but a simple unstamped letter of request is sufficient. A transfer of an amount from one customer's account to another customer's account is not exempt from duty.
Cheques are exempt from stamp duty in the following cases : Cheque drawn by or on behalf of a regis tered Friendly Society (circular from Inland Revenue, November 10, 1894). Section 33 of the Friendly Societies Act, 1896 (59 60 Viet. c. 25), enacts that stamp duty shall not be chargeable upon a " draft or order or receipt given by or to a registered society or branch in respect of money payable by virtue of its rules or of this Act." Cheque drawn by the Registrar of a County Court upon his public account (45 fi 46 Viet. c. 72 Section 9).
Cheque drawn by the Guardians upon a Poor Law Account (4 & 5 Will. 1V c. 76, Section 861.
Cheque drawn by a Trustee in Bank ruptcy (46 fi 47 Viet. c. 52, Section 144).
Cheque drawn on the accounts of estates of companies wound up by order of the Court under the Companies (Consolidation) Act, 1908 (8 Edw. 7, c. 69, Section 230).
Cheque drawn by any officer of the post office for the purpose of remittance to the Postmaster-General (44 & 45 Viet. c. 20, Section 5).
Cheque drawn by Government Depart ments.
Cheque required to be make in pursuance of the Loan Societies Act (3 4 Vict. c. 110, Section 14) or of the rules of the society.
Cheque required to be made in pursuance of the Savings Bank Act (26 fi 27 Vict. c. 87, Section 50).
Cheque drawn by a banker upon another banker in settlement of an account between such bankers (see BTU. OF EXCH \ NGE