Stamp Duty Reserve Tax (SDRT) is a tax which is charged on agreements to transfer 'chargeable securities' for consideration. The tax payable is generally 0.5% of the consideration, but certain transactions may attract a rate of 1.5%. Chargeable securities are broadly UK shares and UK corporate debt which has equity like characteristics (such as debt which can be converted into shares).
In practice, the majority of SDRT is paid automatically on stock exchange transactions dealt with electronically via the UK Central Securities Depository (CREST). For non-financial market transactions, the purchaser (in most cases) should notify HMRC of the transaction giving rise to the SDRT liability, and pay the SDRT due by the seventh day of the month following that in which the agreement is made or becomes unconditional.
An SDRT charge is cancelled if stamp duty is paid on the instrument transferring the securities. SDRT paid is repaid if the instrument is duly stamped within six years of the sale agreement.