This Practice Note explains the key Stamp duty and Stamp Duty Reserve Tax (SDRT) implications of a rights issue; in particular, the stamp duty and/or SDRT consequences of the issue of Nil paid rights, the transfer or renunciation of those rights, the lapse of those rights and the issue of the new Shares.

This Practice Note is drafted on the assumption that the securities being issued under the rights issue are shares.

However, this Practice Note is not relevant to unlisted shares that are admitted to trading on a recognised growth market such as AIM—this is because such shares are in any event exempt from stamp duty and SDRT. For more information on this exemption, see Practice Note: Growth market exemption from stamp duty and SDRT.

Broadly, a rights issue is an offer of new shares at a discount to existing shareholders in respect of, and in proportion to, their existing shareholdings. For more information on what a rights issue is, see Practice Notes: What is a rights issue and key concepts for