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HMRC internal manual

Stamp Taxes on Shares Manual

Scope of Stamp Duty on shares: Stamp Duty - basics of a charge: Transfers of listed securities and connected persons: Market Value calculation

Finance Bill 2018-19 introduces legislation to provide for a new Stamp Duty (and Stamp Duty Reserve Tax (SDRT)) market value rule where listed securities are transferred to a company or its nominee (whether or not for consideration), and the person transferring the securities is connected with the company or is the nominee of a person connected with the company.

For the purposes of a 0.5% or 1.5% Stamp Duty charge under Paragraph 1, Schedule 13, Finance Act 1999 or section 67 or 70 Finance Act 1986 respectively, the value of listed securities on the date of execution of an instrument of transfer is the price which they might reasonably be expected to fetch on a sale in the open market.

In this respect and to determine the market value of the securities, if a customer applies the valuation method set out in The Market Value of Shares, Securities and Strips Regulations 2015 (SI 2015/616), this is acceptable to HMRC. Under that, Stamp Duty on an instrument of transfer is to be calculated by taking the preceding day’s closing prices of the security and applying a mid-point i.e. one half of the difference between the lower and higher share prices added to the lower price. 

STSM021310 explains the effective date when market value is to apply to instruments

STSM021330 explains the meaning of listed securities

STSM021340 explains the meaning of connected company and connected persons

STSM031210 gives information on SDRT implications on transfers of listed securities and connected persons