Scope of Stamp Duty Reserve Tax (SDRT): rates of tax
A charge to Stamp Duty Reserve Tax (SDRT) under FA86/S87 arises where a Person (A) agrees with another Person (B) to transfer chargeable securities (whether or not to Person (B) for consideration in money or money’s worth. The charge applies:
- whether or not there is an instrument or other document is executed completing the transfer;
- whether or not settlement of the transfer takes place;
- whether or not the agreement to transfer is made or effected in the UK or overseas; and
- regardless of whether the parties to the agreement to transfer re resident in the UK or eslewhere.
The principal charge to SDRT is at the rate of 0.5% of the amount or value of the consideration paid in money or money’s worth.
The value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the date of the unconditional agreement (FA86/S87(7)).
- the agreement is subsequently completed by a written instrument of transfer i.e. a stock transfer form, or other document evidencing the transfer, upon which Stamp Duty is paid and impressed thereon, or
- is stamped so that it is relieved from Stamp Duty, or
- is otherwise exempt from a Stamp Duty charge, then
- the SDRT charge is cancelled and any SDRT already paid can be refunded where appropriate (FA86/S92).
A higher SDRT 1.5% rate applies where chargeable securities are transferred (on sale or otherwise than on sale) to an issuer of depositary receipts (or to its nominee) (FA86/S93(1) & (4)) or to an operator of a clearance service (or its nominee) (FA86/S96(1) & (2)).
See STSM031090 for the meaning of ‘chargeable securities’
See STSM031040 for more information on an ‘agreement to transfer’
See STSM031060 for the meaning of ‘money’s worth’
See STSM050000 for information on depositary receipts and clearance services