Stamp duty reserve tax—when it applies
Stamp duty reserve tax—when it applies

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

  • Stamp duty reserve tax—when it applies
  • HMRC guidance—Stamp Taxes on Shares Manual
  • Principal charge
  • Conditional agreement
  • Practical implications of the principal charge
  • The higher rate SDRT charge
  • Rate and consideration
  • Listed securities market value rule for SDRT
  • Listed securities
  • Value of listed securities
  • 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.

Subject to exemptions and reliefs:

  1. SDRT applies to agreements (whether oral or written) to transfer chargeable securities for consideration in money or money's worth (including deemed consideration in accordance with the listed securities market value rule or the unlisted securities market value rule) at a rate of 0.5% (and then rounded to the nearest penny), known as the principal charge to SDRT

  2. it is also possible that SDRT could apply

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