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HMRC internal manual

Stamp Taxes on Shares Manual

Scope of Stamp Duty Reserve Tax (SDRT): chargeable securities - general

The principal charge to Stamp Duty Reserve Tax (SDRT) under FA86/S87 applies where there is an agreement to transfer chargeable securities.

Chargeable Securities - Inclusions

‘Chargeable securities’, is defined in FA86/S99 and includes:

  • stocks, shares or loan capital (FA86/S99(3)(a))
  • interests in, or in dividends or other rights arising out of stocks, shares or loan capital (FA86/S99(3)(b))
  • options to acquire and rights to allotment of or to subscribe for stocks, shares or loan capital (FA86/S99(3)(c))
  • units under a unit trust scheme (FA86/S99(3)(d)), and shares in an Open-Ended Investment Company (OEIC) by virtue of the Stamp Duty and Stamp Duty Reserve Tax (Open-Ended Investment Companies) Regulations 1997 (SI 1997/1156).
  • stocks, shares or loan capital within FA86/S99(3)(a)-(c) which are issued or raised by a non-UK incorporated company but registered in a register kept in the UK (FA86/S99(4)(a)
  • shares issued or raised by a non-UK incorporated company which are paired with shares issued by a UK incorporated company (FA86/S99(4)(b))

Chargeable Securities- Exclusions

‘Chargeable securities’ as defined in FA1986/S99 does not include:

  • securities which are exempt from all stamp duties (FA86/S99(5) & (5ZA))
  • securities which relate to underlying securities which are exempt, such as gilts and non-convertible loan capital
  • loan capital where the return bears an inverse relationship to results
  • interests in depositary receipts for stocks or shares (FA86/S99(6)) or UK securities held within an unelected clearance service (FA86/S90(5) & (6)) for the purposes of a 0.5% charge  
  • securities which:
    • are issued or raised by a company incorporated outside the UK (and with no UK register)
    • are not paired with shares in a UK company (FA86/S99 (4)
    • are issued or raised by a Societas Europaea (SE) with a registered office outside the UK (FA86/S99 (4A))
  • securities within FA86/S99(3)(a) to (c) which are admitted to trading on a recognised growth market but not listed on that or any other market (FA86/S99(4B))
  • securities within FA86/S99(3) transferred to a charitable company or trustees of a charitable trust by virtue of FA86/S90(7)
  • securities within FA86/S99(3) transferred to a depositary under an Authorised Contractual Scheme (ACS); between depositaries under the same ACS; transfer of units in an ACS
  • units in a unit trust scheme (or shares in an OEIC) where the trustee(s) of the scheme (or company) are resident outside of the UK and no unit (or share) register is kept in the UK; or the scheme or company can only invest in exempt investments (FA86/S99(5A)

STSM058000 provides information what is meant by an elected clearance service.

See STSM101200 for information on Authorised Contractual Schemes