Exemptions from the higher rate charges to stamp duty and SDRT
Exemptions from the higher rate charges to stamp duty and SDRT

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Exemptions from the higher rate charges to stamp duty and SDRT
  • Executive summary
  • Impact of the HSBC and BNY Mellon case
  • Exemption for transfers between depositaries and/or clearance services
  • Exchange relief for mergers or takeovers
  • Replacement securities
  • Sterling-denominated UK bearer instruments other than renounceable letters of allotment
  • Non-sterling denominated UK bearer instruments which raise new capital

Executive summary

When securities are transferred into a depositary receipt system or a clearance service, a 1.5% charge to stamp duty or SDRT generally arises, provided that the transfer is not an integral part of an issue of share capital/the raising of capital. The higher rate SDRT charge arises when chargeable securities are transferred into such a system or service. The higher rate stamp duty charge applies to an instrument which transfers relevant securities (defined as shares, stock or marketable securities of any company, whether UK incorporated or not) into such a system or service.

For more information, see Practice Note: Higher rate SDRT and stamp duty charges.

Where this Practice Note refers to securities being issued or transferred into a depositary receipt system or a clearance service, it means that they have been issued or transferred to:

  1. a depositary (or its nominee) for the purpose of issuing depositary receipts in respect of those securities, or

  2. to a clearance system operator (or its nominee) for the purpose of providing clearance services in respect of those securities

The higher rate charge to stamp duty or SDRT (as applicable) is disapplied where one of the exemptions outlined in this Practice Note applies.

In addition to the specific exemptions from the higher rate charges to stamp duty or SDRT that are outlined in this note, it