Stamp Duty Reserve Tax: reliefs and exemptions

When electronic transfers are exempt from Stamp Duty Reserve Tax (SDRT) and when and how you can get SDRT relief.


Sometimes you don’t have to pay SDRT on electronic (paperless) transfers of stocks, shares and other securities. This may be because the transaction is exempt or because you can claim a relief.

Transfers that are exempt from Stamp Duty Reserve Tax

Paperless transfers of stocks, shares and other securities are exempt from SDRT (there is no tax to pay) if they are:

  • shares that you receive as a gift and that you don’t pay anything for (either money or some other consideration)
  • shares that someone leaves you in their will
  • shares that your spouse or partner transfers to you when you marry or enter into a civil partnership
  • shares that are transferred when you get divorced, or when your civil partnership is dissolved
  • shares held in trust that are transferred from one trustee to another
  • shares that are admitted to trading on a recognised growth market but not listed on any market
  • transfers that a liquidator makes as settlement to shareholders when a business is wound up

Enquiries about SDRT exemptions

If you’re not sure whether your transaction is exempt from SDRT, you can contact the SDRT Helpline.

What to do if a transfer is exempt

Off-market transfers

You don’t need to tell HM Revenue and Customs (HMRC) about exempt off-market transfers. However, you’ll need to keep all the relevant documents so that if HMRC asks, you can demonstrate why SDRT wasn’t due. HMRC can ask to see proof that the transfer was exempt for up to 6 years after the transaction date.

CREST transfers

For electronic transfers using CREST - the electronic shares settlement and registration system - you’ll need to apply the appropriate CREST transaction status flag. See the later section on ‘How to claim a Stamp Duty Reserve Tax relief or exemption’.

Transfers that qualify for Stamp Duty Reserve Tax relief

There are some transactions that qualify for relief. As with exemptions, this means there’s no SDRT due.

The most common reliefs you can claim are:

  • transfers of loan capital - generally no SDRT is payable, but there are some exceptions
  • sales to intermediaries - there’s no SDRT to pay when stock is transferred to a recognised intermediary
  • repurchases and stock lending - there’s no SDRT to pay if transfers of stock meet certain conditions
  • transfers to charities - there’s no SDRT to pay so long as certain conditions are met

Paperless transactions that may qualify for Stamp Duty relief

In some cases you can’t claim SDRT relief directly, but will need to claim Stamp Duty relief instead.

This applies to:

  • intra-group relief - for transfers of shares between companies in the same group, if certain conditions are met
  • acquisition relief - when one company acquires all the shares in another company but the same people own both companies and the share structure of both companies is identical

If you want to claim either of these reliefs you’ll need to send your documents to HMRC to be stamped. If HMRC accepts your claim for relief from Stamp Duty and the documents are stamped, you won’t have to pay SDRT either.

You can find out more about the reliefs you can claim in section STM040000 of the Stamp Taxes on Shares Manual.

Enquiries about SDRT relief

If you need help in deciding whether you can claim a SDRT relief you can contact the SDRT Helpline.

How to claim SDRT relief

Off-market transfers

In most cases you don’t need to do anything to claim relief from SDRT. But you must keep any supporting evidence to show HMRC that the relief was applied correctly if they question it in the future.

Transactions made through CREST

If you’re claiming an SDRT relief or exemption for a share transaction made through CREST, you’ll enter a specific code - the Transaction Stamp Status (TSS) flag - along with details of the transaction. When the relevant TSS flag is entered into the system, the relief is given automatically. If you’re transferring shares on your own account your stockbroker will enter the appropriate flag into CREST.

Each TSS flag consists of a capital letter or a number and is associated with a particular relief. You can see the most common TSS flags in the table below.

CREST Transaction Stamp Status (TSS) flags

TSS flag Stamp Duty Reserve Tax relief/exemption
O Transfer to/from a nominee, with no change of beneficial owner, or transfer between nominees of the same beneficial owner
S Transfer to exempt charity
T SDRT paid through CREST on another CREST transaction
U Stamp Duty paid outside CREST on a physical document (including form 169), or SDRT paid (or to be paid) outside CREST on a corporate action
W Issuing house exemption on new issue
3 Intra-group transfer, a letter of direction having been executed
4 Stock loan return or transfer of delivery-by-value collateral relating to loans
5 Letter of direction has been executed (including pension scheme mergers, purchase of life insurance policies and transfers by way of security for loans)
6 Authorised unit trust merger or authorised unit trust/open-ended investment company conversion or amalgamation
7 Stamp liable outside the UK

You’ll need to keep records so that if HMRC asks, you can show them why the transaction was flagged for relief.

If you don’t claim a relief you’ll have to pay the SDRT in full.

Purchases on behalf of clients acting for exempt charities

If you’re the ‘accountable’ person for SDRT purposes and you buy shares on behalf of a fund or investment manager acting on behalf of a charity that is exempt from SDRT you’ll need to enter ‘S’ as the TSS Flag. If your client has an agreement with HMRC not to have to provide you with full details about the charity, you’ll need to enter your client’s reference number into CREST rather than your own.

If you apply a relief incorrectly

If you apply a relief incorrectly and don’t pay any SDRT you may have to pay a penalty and interest. This is because you won’t have paid the correct amount of SDRT by the due date.

Paper transactions - Stamp Duty reliefs and exemptions

Find more about Stamp Duty reliefs and exemptions on paper stock transactions.

Published 30 January 2012