Stamp duty ― basic rules

Produced by Tolley in association with Grant Thornton's stamp taxes team

The following Corporation Tax guidance note Produced by Tolley in association with Grant Thornton's stamp taxes team provides comprehensive and up to date tax information covering:

  • Stamp duty ― basic rules
  • Introduction and scope
  • Basis of charge and consideration
  • Stocks and securities
  • Assumption / satisfaction of debt
  • Unascertainable consideration
  • Common exemptions
  • Administration
  • Interest
  • Penalties
  • More...

Introduction and scope

Stamp Duty is a tax on documents and has existed for over 300 years. During the latter part of the 20th century, and in particular following the introduction of Stamp Duty Land Tax (SDLT), the scope of Stamp Duty has been narrowed significantly.

The documents which are now within the scope of Stamp Duty are broadly confined to:

  1. instruments relating to stock or marketable securities

  2. instruments transferring an interest in a partnership the assets of which include stock or marketable securities

  3. instruments which transfer UK land and buildings where the contract was entered into before SDLT was introduced and which are not within the SDLT regime

In practice, by far the most common circumstance where stamp duty is encountered is on stock transfer forms for the purchase of unquoted shares in UK registered companies.

The stamp duty statute is spread over many years, the most important legislation being the Stamp Act 1891 and FA 1999, Sch 13.

HMRC manual references are to the Stamp Taxes on Shares Manual (STSM).

On 21 July 2020, the Government issued a call for evidence inviting views on the design for a new framework for stamp duty and stamp duty reserve tax, which will help inform a broader long-term modernisation of the regimes. The consultation will close on 13 October 2020.

Basis of charge and consideration

In most cases Stamp Duty is calculated at 0.5% of the amount or value of the considerationfor the transfer rounded up to the nearest £5.

Where the considerationfor the transfer (including other linked transactions) does not exceed £1,000 and an appropriate certificate is included in the document to which the transaction relates, then no Stamp Duty will be due and no stamping of the document is required. See STSM011060 for details regarding exemption certificates.

Only certain elements of considerationare taken into account for Stamp Duty purposes. Importantly, considerationin the form of services, goods, and intellectual property may not result in a charge to Stamp Duty. See

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