A bill passed by parliament Friday which exempts transactions of Bermuda Stock Exchange (BSX) listed securities from stamp duty, is “elitist” and discriminates against the “man in the street” says the Opposition party's Cole Simons.

The Bermuda Stock Exchange Amendment Act 2002, a private bill, was passed without objection Friday. Its main provisions are that the BSX be deemed as Bermudian, that stamp duties not be imposed on any transfer of securities and that officers of the exchange will not be liable for damages for their actions unless it can be shown that they acted in bad faith.

Finance Minister Eugene Cox noted that the private bills committee is made up of members from both sides of the political divide as well as technical officers and that there was plenty of time for input from the Opposition before the bill was brought to the House. Mr. Simons - a banker - is particularly concerned about the stamp duty exemption.

“Is it equitable that Mr. and Mrs. Brown of Curving Avenue pays $12,000 in stamp duty to transfer their primary and probably their only investment, their home, to their daughter Liz while a very successful business man from Tuckers Town, or elsewhere can gift or transfer $5,000,000 worth of (shares) to his or her children or friends, without paying one red cent in stamp duty?” he said yesterday.

“Every one knows that most Bermudians, in particular black Bermudians invest their money in their homes and real estate,” he continued. “Only a few have the privilege of investing in their homes and also a large Bermudian investment portfolio.

“If we want to gift our home or other real estate to our children, or the next generation, we have to pay hefty gift taxes, or stamp duties which erode or reduce the value of assets transferred.

“On the same vein our friends from Tuckers Town can transfer their $5,000,000 investment portfolio to their children and pay no stamp duty, not one red cent and thereby expose their investment portfolio to no tax erosion.”

He added that Government was “feathering its own nest” or “the nest of its real friends” with the legislation.

“It favours the economic elite. It does nothing for our grass roots, the man in the street,” he continued in a faxed statement.

“It represents old money manipulation. It is a loophole for the rich who do not now need to hire fancy lawyers to preserve their multi million dollar investments from Government taxes.”

He pointed out that transferring $5,000,000 in securities would attract stamp duties of $1,000,000 in the United Kingdom and up to $2,000,000 in the United States.

Asked to respond, Finance Minister Eugene Cox said that he was too busy attending to other matters to give a detailed response to Mr. Simons' criticism. But he pointed out that the private bills process gives the ordinary person access to parliament and is another route for getting legislation passed. He also noted that the Private Bills Committee is a bipartisan body and includes civil servants.

“Members on both sides had the opportunity to review the thing,” Mr. Cox said. “No one has said anything to me until now.”