Growth market exemption from stamp duty and SDRT
Growth market exemption from stamp duty and SDRT

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

  • Growth market exemption from stamp duty and SDRT
  • Conditions for relief
  • What is a growth market?
  • Market capitalisation test
  • Compounded annual growth test
  • Application to be a recognised growth market
  • Admitted to trading on a recognised growth market
  • Not listed on any market
  • Revocation of recognition
  • Stamp duty exemption
  • more

Since 28 April 2014, no stamp duty or stamp duty reserve tax (SDRT) is chargeable on a transfer of shares or securities that are:

  1. admitted to trading on a recognised growth market, and

  2. not listed on that or any other market, ie not listed on a recognised stock exchange

The government's stated objective is for this growth market exemption to 'boost investor participation in equity growth markets and improve the conditions for growing companies to raise equity finance'.

A list of CREST-settled securities exempted by this measure is available on the Euroclear UK & Ireland website. Euroclear is the operator of the CREST settlement system.

This Practice Note outlines the conditions that must be satisfied for this exemption to apply. This Practice Note also refers to this exemption as the growth market exemption.

Many debt securities already benefit from the loan capital exemption from stamp duty and SDRT, so this new exemption won't make any difference to trading in such securities. This growth market exemption, however, applies not only to plain vanilla debt securities, but also to debt securities with equity-like features or conversion rights and to shares which cannot benefit from the loan capital exemption. For more information, see: Growth market exemption not limited to shares.

For more information on the stamp duty and SDRT exemption for loan capital, see Practice Note: Loan capital exemption