The Cayman Islands Insurance Association (“CIIA”) would like to inform the public about The Stamp Duty (Amendment) Law 2012, certain provisions of which are being brought into effect on 01 June 2013.
This Law, which was enacted by the CI Government, increases the Stamp Duty applicable to property insurance premiums. In order to assist the public in understanding how the revised law will affect them when they purchase or renew their insurance, the CIIA has prepared answers to frequently asked questions.
Q. What is the current rate of Stamp Duty charged on insurance policies?
A. Currently the CI Government charges a flat rate of $12 Stamp Duty on all insurance policies in the Cayman Islands.
Q: How will this change on 1 June 2013?
A: All policies which incept renew or are amended on or after 1 June 2013 will be charged an additional Stamp Duty fee of 2% of the insurance premium related to immovable property. Immovable property includes buildings, docks, jetties, outbuildings and pools. It does not include furniture and other contents.
So for example if you are purchasing a new policy or renewing an existing policy on your home and the premium for the house was $5,000 you would pay Stamp Duty of $112 calculated as 2% plus $12 on the insurance premium for the house which is classified as immovable property.
The 2% would also apply if you amended your policy on or after 1 June 2013 and the amendment resulted in additional premium being due on any immovable property.
Q. Will other insurance policies also be charged the 2% fee?
A: No. In its current form, the additional fee of 2% only relates to immovable property (i.e. buildings, docks, jetties outbuildings & pools). All other insurance policies remain subject to the flat $12 Stamp Duty Fee. In other words, customers will have to pay an additional amount of 2% of the insurance premium relating to immovable property.
Q. What is the purpose of this Law?
A: The CI Government is enacting this additional fee (or tax) as a measure to increase revenue.
Q. At what point is the Stamp Duty payable?
A. The Cayman Islands Government Stamp Duty is due in full at policy inception.
Q: When do I have to start paying the extra stamp duty?
A: Government is requiring that insurance companies begin charging and collecting this additional stamp duty as at 1 June 2013.
Q: Who is this money going to?
A: The money is going to the CI Government. The money is not going to the insurance company.
Q: Will all insurance companies be collecting this additional fee?
A: Yes. All insurance companies are required by law to collect this fee on behalf of the CI Government including those insurance companies that are outside the Cayman Islands.
Q: Where can I find out more information on the Stamp Duty (Amendment) Law?
A: The text of this Law was published in the Extraordinary Gazette, Issue 123 published on Tuesday, 11 December 2012. You can access the gazette at www.gazettes.gov.ky
If you are still in doubt or need further clarification we recommend you contact your insurance provider & they will be more than happy to assist and answer any other questions you may have.