Interaction between SDRT and stamp duty
Interaction between SDRT and stamp duty

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

  • Interaction between SDRT and stamp duty
  • HMRC guidance—Stamp Taxes on Shares Manual
  • Securities exempt from all stamp duties are not chargeable securities
  • Practical implications
  • Primacy of SDRT over stamp duty
  • SDRT cancelled by duly stamped instrument of transfer
  • Partial cancellation
  • Time limit
  • Application to HMRC normally only required for repayment of SDRT
  • Duly stamped
  • More...

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: The government is asking for views on the principles and design of a new framework for stamp duty and stamp duty reserve tax (SDRT) to inform a longer-term modernisation of the stamp taxes on shares (STS) framework. The call asks for views on what should be prioritised for modernisation including questions on amalgamating stamp duty with SDRT, the scope of stamp duty and SDRT, reporting and collecting STS and enforcement and payment of STS. The call follows a review and a report by the Office of Tax Simplification in 2017. The government envisages that it will consult further on specific policy and legislative changes with no major legislative redesign until Finance Bill 2021–22 at the earliest. The closing date for comments is 13 October 2020. For more information, see News Analysis: HMRC launches call for evidence on designing a new stamp taxes framework.

The 0.5% principal charge to SDRT is a tax that arises on an agreement (whether oral or written) to transfer chargeable securities for consideration (or, in certain circumstances where either of the SDRT market value rules applies, deemed consideration) in money or money’s worth. Stamp duty, by comparison, is a duty on instruments of transfer (ie physical documents) relating to stock or marketable securities or interests in partnerships where the

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