Exemptions from the principal charge to SDRT
Exemptions from the principal charge to SDRT

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

  • Exemptions from the principal charge to SDRT
  • Executive summary
  • HMRC guidance—Stamp Taxes on Shares Manual
  • No principal charge to SDRT if no consideration unless targeted market value rule applies
  • No chargeable security, no SDRT
  • Key exemptions from the principal charge to SDRT
  • Stamp duty exemptions and reliefs indirectly applicable to SDRT
  • Exemption for certain transactions involving collective investment schemes and ETFs
  • Abolition of schedule 19 charge

Executive summary

An agreement to transfer chargeable securities for consideration in money or money's worth generally gives rise to a principal charge to SDRT at a rate of 0.5% of the consideration. For more information, see Practice Note: Stamp duty reserve tax—when it applies.

Under the targeted market value rule that applies in respect of an agreement (whether or not for consideration) to transfer listed securities to a company connected with the transferor, the consideration chargeable to SDRT is treated as being equal to the higher of the market value of the listed securities and the consideration in money or money’s worth. In such cases, the principal charge to SDRT is applied to the market value of the listed securities even if no consideration is given at all. For more information, see: Stamp duty reserve tax on the sale of UK shares held in CREST—Targeted market value rule for SDRT. An equivalent targeted market value rule also applies for stamp duty purposes.

The principal charge to SDRT does not apply to an agreement to transfer chargeable securities where an exemption from the principal charge applies. Although there are various exemptions, it is important to remember that the principal charge to SDRT also does not apply:

  1. in cases where the agreement is not for consideration in money or money's worth unless it