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HMRC internal manual

Stamp Taxes on Shares Manual

Scope of stamp duty on shares: stamp duty: basics of a charge: transfer of Permanent Interest Bearing Shares

Permanent Interest Bearing Shares (PIBS) are building society shares which count as capital. Being mutual institutions, building societies do not and cannot have share capital in the same way as companies. Building society “shares” are effectively debt deposits carrying, amongst other things, limited voting rights to the surplus of a Society on dissolution.

Section 109(1)(e) Building Societies Act 1986 exempts from Stamp Duty (SD) “any other instrument whatsoever which is required or authorised to be given, issued, signed, made or produced in pursuance of this Act or of the rules of a Building Society”.

Section 109(1)(b) and (c) exempt building society shares and bonds respectively. Therefore the transfers of PIBS issued by a building society are exempt from SD and do not need to be stamped.

These transfers should not be confused with the transfers of convertible notes which automatically convert into PIBS. Such transfers are liable to SD. See STSM021230.