Scope of stamp duty on shares: stamp duty: basics of a charge: transfer following failure to lodge a renounceable letter of allotment
A transfer following a failure on the transferees’ part to lodge a renounceable letter of allotment does not, if executed on or after 13 March 2008, attract Stamp Duty (SD). Prior to that date it would have attracted fixed stamp duty of £5.
An allottee has either an equitable right to the shares allotted or a conditional right to subscribe for them. They can sell that right but if they have an equitable right they can sell the shares themselves. SD is chargeable at the standard rate on an instrument completing that sale if there is a contract to sell the shares or if the shares transferred represent the rights sold.