Stamp Duty Reserve Tax - the basics

You pay Stamp Duty Reserve Tax (SDRT) on electronic paperless share transactions - find more about when and how much you might need to pay.


You pay SDRT on paperless transactions when you buy:

  • shares in a UK company
  • shares in a foreign company with a share register in the UK
  • an option to buy shares
  • rights arising from shares already owned
  • an interest in shares, like an interest in the money made from selling them

Following the decisions in HSBC Holdings and Vidacos Nominees Ltd v HMRC and HSBC Holdings PLC and the Bank of New York Mellon Corporation V HMRC, the purchase of a new issue of shares made in accordance with EU Council Directive 2008/7/EC is outside of the scope of the SDRT tax charge.

The decisions will also apply to the new issue of a debt security which falls within the scope of Article 5(2)(b) of the Capital Duty Directive. For example, loan notes and corporate bonds - to the extent that these securities aren’t already exempt from charge under sections 79 and 99(5) FA 1986).

SDRT is still payable when you buy units in unit trusts or shares in open-ended investment companies - though how it’s paid differs from shares.

Transfers using CREST

Most paperless share transactions that you pay SDRT on are carried out electronically through CREST, the electronic settlement and registration system administered by Euroclear.

CREST automatically collects the SDRT and sends it to HM Revenue and Customs (HMRC). Your stockbroker then settles up with CREST and bills you for the SDRT and their own fees.

SDRT on ‘off-market’ transactions

You have to pay SDRT on ‘off-market’ transactions. These include shares that are transferred outside CREST and are held by a nominee like a bank. In most cases, a stockbroker deals with this type of transaction and pays the SDRT direct to HMRC. But if you deal with it yourself, you have to notify HMRC about the transaction and make the payment.

If you buy units in unit trusts from anyone other than a fund manager these are also treated as ‘off market’ transactions and you’ll have to notify HMRC and make the payment.

Deadline for notifying and paying HMRC

When you buy shares or unit trust units off-market, you have to notify HMRC about the transaction and pay the SDRT by the ‘due date’ - this is the seventh day of the month after the month in which you bought them. For example if you buy shares or units on 18 April you have to notify HMRC and pay the SDRT on or before 7 May.

If you don’t make your payment by the due date, you’ll have to pay interest from the date the SDRT was due until the date when you pay it. You may have to pay a penalty as well.

Find more about how to pay Stamp Duty Reserve Tax for off-market purchases, including what information you need to supply with your payment, and the different payment methods available to you.

Unit trusts and open ended investment companies (OEICs)

Unit trusts and OEICs are dealt with under special rules. When you buy units from a fund manager you’re not charged SDRT. But when units are surrendered the fund manager is charged SDRT. The fund manager pays the SDRT directly to HMRC and usually passes this on to the unit holders through management charges.

If you buy units in unit trusts yourself you’ll need to notify HMRC and pay any SDRT due.

If you are a financial institution dealing with units in unit trusts or shares in an OEIC you’ll need to send an SDRT notice along with the correct payment to HMRC by the 14th of the month.

Send your notice and payment to HMRC Birmingham Stamp Office. Mark your correspondence ‘SDRT’ and include any reference number.

SDRT is not charged on Unit trust and OEICs transactions after 31 March 2014

Abolition of SDRT applied to collective investment schemes

Legislation was introduced in Finance Bill 2014 to abolish Part 2 of Schedule 19 to Finance Act (FA) 1999. Consequential amendments have been made to primary legislation in Finance Bill 2014. The changes take effect from 30 March 2014.

Find more about abolition of SDRT for collective investment schemes.

You can read more about unit trusts and OEICs - including how to calculate SDRT payments in Chapter 15 of the Stamp Taxes Manual.

How much is payable

The amount of SDRT you pay is worked out at a flat rate of 0.5% (rounded up or down to the nearest penny) based on what you give for the shares, not what the shares are worth.

So if it’s a cash transaction, the amount of SDRT is based on the amount of cash you pay. For example, if you buy shares for £1,000 you’ll pay £5 SDRT whatever the value of the shares themselves.

If you give something else of value the SDRT is based on the value of what you give. But if you’re given the shares for nothing and don’t give anything for them in return you don’t have to pay any SDRT.


If you have any queries about SDRT that aren’t covered above, you can contact the Stamp Duty Reserve Tax Helpline.

Published 3 December 2014