STSM013040 - Introduction to Stamp Duty on shares and Stamp Duty Reserve Tax (SDRT): Stamp duty rates: Stamp Duty - rounding up
Stamp Duty is a charge on instruments of transfer (see STSM011010). Section 112 (1) (b) FA1999 requires that Stamp Duty is “rounded up (if necessary) to the nearest multiple of £5”. This means that unless the figure arrived at by applying the Stamp Duty rate is an exact multiple of £5 it is rounded up.
For example, consideration of £2,000 chargeable at 0.5% gives rise to Stamp Duty of exactly £10. Consideration of £2,001 gives rise to Stamp Duty of £10.005 which is rounded up to £15. The fact that .005 of a pound does not exist in coinage does not mean that it is ignored. To do so would be to round down, for which there is no statutory authority.
This rounding up provision applies irrespective of the rate of Stamp Duty that is applied.
Information on rounding on the SH03 form used to report purchases of own shares can be found at STSM021260.
Information on the procedures for block transfers and the application of rounding to them can be found at STSM021190.