Stock lending and repo relief from stamp duty and SDRT
Produced in partnership with Kevin Griffin
Stock lending and repo relief from stamp duty and SDRT

The following Tax guidance note Produced in partnership with Kevin Griffin provides comprehensive and up to date legal information covering:

  • Stock lending and repo relief from stamp duty and SDRT
  • HMRC guidance—Stamp Taxes on Shares Manual
  • What are stock lending and repo transactions?
  • Transactions qualifying for stock lending and repo relief
  • Definitions
  • Stock lending/repo relief from stamp duty must be claimed
  • Relief from SDRT is automatic within CREST
  • Delivery by value and trade system of origin
  • Clawback of relief
  • Effect of insolvency of a party
  • more

Coronavirus (COVID-19) impact on stamp duty process: During the coronavirus outbreak, the Stamp Office is temporarily only accepting electronic versions of instruments of transfer and/or claims for relief from stamp duty and, where stamp duty is due, only accepting electronic transfer of funds (not cheques). For more information, see Practice Note: Coronavirus (COVID-19)—tax implications—Stamp taxes.

Provided the strict conditions for the stock lending and repo relief from stamp duty and SDRT are satisfied:

  1. no liability to SDRT arises on an agreement to transfer chargeable securities pursuant to a stock lending or repo transaction, and

  2. 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:

  1. SDRT, see Practice Note: Stamp duty reserve tax—when it applies and

  2. stamp duty, see Practice Note: What does stamp duty apply to?

This Practice Note explains:

  1. what stock lending and repo transactions are and the relief from stamp duty and SDRT for such transactions

  2. the conditions which must be satisfied for the relief to apply

  3. the clawback of the relief

  4. the relaxation