Q&As

Who is liable to pay the stamp duty when an employee is transferred shares from an employee benefit trust in order to satisfy his share award? If the employee is not required to pay the stamp duty, is he receiving a benefit in kind?

read titleRead full title
Published on LexisPSL on 28/01/2016

The following Share Incentives Q&A provides comprehensive and up to date legal information covering:

  • Who is liable to pay the stamp duty when an employee is transferred shares from an employee benefit trust in order to satisfy his share award? If the employee is not required to pay the stamp duty, is he receiving a benefit in kind?

Subject to available exemptions and reliefs, an agreement to transfer chargeable securities for consideration in money or money's worth will usually give rise to a principle charge to stamp duty reserve tax (SDRT) or stamp duty at a rate of 0.5% of the consideration. SDRT arises on any such agreement (whether written or oral) to transfer chargeable securities, whereas stamp duty arises on physical stock transfer documents. Therefore, in practice, as SDRT usually falls due before stamp duty in respect of a transaction, SDRT is the primary stamp tax on securities transactions. However, the execution and stamping of an instrument with appropriate stamp duty discharges any SDRT liability.

Where the trustee of an employee benefit trust (EBT) transfers shares to an employee in order to satisfy his award or option, stamp duty will normally apply by virtue of the stock transfer form that the trustee enters into in order to effect the transfer. This is subject to any available exemptions or reliefs that may apply, such as where there is no consideration for the shares, or the consideration does not exceed

Related documents:

Popular documents