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HMRC internal manual

Stamp Taxes on Shares Manual

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HM Revenue & Customs
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Scope of stamp duty on shares: stamp duty: basics of a charge: company purchasing its own shares

Section 162 Companies Act 1985 (to be superseded by Part 18 Companies Act 2006 with effect from 1 October 2009) empowers a company to purchase its own shares. It is compulsory for a company buying its own shares to make a return to the Registrar of Companies.

The return is made on a Form 169 (This content has been withheld because of exemptions in the Freedom of Information Act 2000) if the shares are to be cancelled or on Form 169(1A) if the shares are to be held in treasury. FA86/S66 makes the appropriate form chargeable with Stamp Duty (SD) on the consideration given.

There may be more than one transfer underlying the return but no account is taken of this for SD purposes. Likewise, it is the date of the return that is taken into account when considering whether a penalty and/or interest is chargeable.

If a stock transfer form has been used to record the sale to the company this does not attract SD. Any such forms submitted with a Form 169 or 169(1A) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) will be returned unstamped.

Any further return to Companies House cancelling shares which were notified, and duty paid, on a Form 169(1A) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and are so held in treasury, does not attract a Stamp Duty charge.