The following Tax guidance note Produced in partnership with Kevin Griffin provides comprehensive and up to date legal information covering:
Provided the strict conditions for the stock lending and repo relief from stamp duty and SDRT are satisfied:
no liability to SDRT arises on an agreement to transfer chargeable securities pursuant to a stock lending or repo transaction, and
no stamp duty arises where transfers of securities pursuant to such arrangements are documented (ie effected by an instrument of transfer such as a stock transfer form)
The policy reason behind this relief is that stock lending and repo transactions are important in maintaining liquidity in the securities markets, for which see: Practical use of stock lending and repo transactions.
For more information on:
SDRT, see Practice Note: Stamp duty reserve tax—when it applies and
stamp duty, see Practice Note: What does stamp duty apply to?
This Practice Note explains:
what stock lending and repo transactions are and the relief from stamp duty and SDRT for such transactions
the conditions which must be satisfied for the relief to apply
the clawback of the relief
the relaxation of the strict conditions where one party becomes insolvent so that the transaction does not run its full course, and
the common circumstances when stock loans and repos, and therefore the relief, are used in practice
Before considering whether the detailed conditions of stock lending and repo relief apply to a transfer of securities, it is
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