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HMRC internal manual

Stamp Taxes on Shares Manual

Introduction to Stamp Duty on shares and Stamp Duty Reserve Tax (SDRT): more about Stamp Duty and SDRT: Stamp Duty - facts and circumstances at the date of execution

As previously mentioned (see STSM011010) Stamp Duty (SD) is charged on instruments, not transactions. Section 5 Stamp Act 1891 provides that all the facts and circumstances that affect the liability of a document to duty should be “fully and truly set forth in the instrument. It also imposes penalties for deliberate failure to comply with this provision.

It is particularly important that all the consideration given for the subject matter of the transaction is accurate and it is the responsibility both of the person preparing the document and of all signatories to ensure that this is so. This does not mean that the consideration must be quantified; for example, a stock transfer form may refer to “the consideration stated in an agreement of even date between the parties hereto”. This would be acceptable but the cited agreement would need to be presented with the document to be stamped so that the stamp duty examiner could determine the amount of the chargeable consideration.

It is likely that the agent would wish to have the adjudication stamp applied to such an instrument. This is perfectly acceptable provided that the document examiner is confident that the correct SD has been paid. This does not, however, apply to documents which are stamped on a provisional basis (see STSM017030). The adjudication stamp can only be applied on final stamping.