Stamp duty and SDRT on the sale of certificated registered UK shares

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

  • Stamp duty and SDRT on the sale of certificated registered UK shares
  • HMRC guidance—Stamp Taxes on Shares Manual
  • Share purchase agreement generally not subject to UK stamp duty
  • Stock transfer form subject to UK stamp duty
  • Buyer generally pays UK stamp duty
  • Consideration chargeable to UK stamp duty
  • Cash consideration determined by reference to completion accounts
  • Practical implications
  • Earn-out consideration
  • Practical implications
  • More...

Stamp duty and SDRT on the sale of certificated registered UK shares

FORTHCOMING CHANGE relating to electronic stamping becomes permanent on 19 July 2021: With effect from 19 July 2021, the electronic process of stamping documents under which an instrument of transfer is stamped by the issue of a letter, which was put in place temporarily during the coronavirus pandemic, becomes permanent. On that same date, the Stamp Office’s stamping machines are retired and the electronic stamping process is the only valid method of duly stamping an instrument of transfer. Consequently, taxpayers should submit electronic versions of instruments of transfer and/or claims for relief from stamp duty and, where stamp duty is due, make electronic transfers of funds (not submit cheques). If, as a result of treating the electronic process of stamping documents as the only method of duly stamping documents, any instrument of transfer is rendered useless (ie treated as not being duly stamped even though it was stamped with a physical stamp), then within six months of the physical stamping being withdrawn, taxpayers can request that the instrument of transfer be treated as duly stamped under the electronic method instead. For more information, see Practice Note: Coronavirus (COVID-19)—tax implications—Stamp taxes.

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: On 20 July 2021, the government published a summary of responses document

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