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HMRC internal manual

Stamp Taxes on Shares Manual

Introduction to Stamp Duty on shares and Stamp Duty Reserve Tax (SDRT): Stamp Duty and SDRT basics: what is Stamp Duty?

Stamp Duty (SD) is charged on instruments that transfer an interest in property. It used to apply to many different types of property but is now limited to the transfer of stocks or marketable securities, interests in partnerships where the partnership assets include stock or marketable securities, and certain documents giving effect to contracts entered into on or before 10 July 2003. (See STSM011040.)

The liability to SD is determined by reference to the legislation in place at the date of execution of the instrument. Where an instrument is chargeable with SD, there is no provision for the duty to be collected directly from taxpayers by assessment or for payment to be specifically enforced. But for most legal and registration purposes an instrument must be stamped to have any validity. A physical stamp or stamps impressed on the instrument itself evidence the value of the duty paid.

For instruments executed on or before 13 March 2008 either fixed or ad valorem (by value) duty was chargeable depending on the nature of the instrument. Ad valorem duty varies with the amount of consideration payable whereas fixed duty is a set amount. Following the deregulation measures in Finance Act 2008, fixed duties are now uncommon and have no application to current transactions.