Stamp duty reserve tax

Produced by Tolley in association with Grant Thornton's stamp taxes team
Stamp duty reserve tax

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 reserve tax
  • Basic rules
  • Chargeable securities
  • Administration and compliance
  • Payment
  • Penalties
  • Interest
  • Interaction between SDRT and stamp duty
  • Common issues for non-financial market transactions
  • Stamp duty reliefs
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant tax changes associated with Brexit began to take effect. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — impact for UK companies guidance note.

Stamp duty reserve tax (SDRT) was introduced by Finance Act 1986 to ensure that a charge equivalent to stamp duty would apply on the transfer of uncertificated securities. As there is no document transferring the shares in a paperless transaction, and therefore no document to stamp, without SDRT there would be no mechanism to collect the stamp duty.

In practice, the majority of SDRT is paid automatically on stock exchange transactions dealt with electronically via the UK Central Securities Depository (CREST). Analysis of the application of SDRT to financial market trading is not outlined further in this guidance note.

Transfers of securities outside CREST are normally effected by a transfer document on which stamp duty is paid. This generally has the impact of cancelling any SDRT liability (see below). Nevertheless, taxpayers and advisers need to be aware of the potential application of SDRT where there are agreements to transfer securities, in particular looking out for situations where there is an agreement to which SDRT applies but no corresponding document which is subject to stamp duty. Without further planning, the SDRT liability would not be extinguished in such circumstances.

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.

Basic rules

SDRT applies where there is an unconditional agreement, whether documented or otherwise, to transfer 'chargeable securities' (see

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