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HMRC internal manual

Stamp Taxes on Shares Manual

Exemptions and Reliefs: exemptions: Stamp Duty Reserve Tax (SDRT) repaid/charge cancelled where an instrument is duly stamped

Stamp Duty Reserve Tax (SDRT) is charged on agreements to transfer chargeable securities, whereas stamp duty is payable on the instrument of transfer that effectively completes a sale. The scope of stamp duty is not the same as SDRT (see STSM031150), but the fact that they largely overlap leads to the possibility of a double charge

To avoid double charging, FA86/S92 provides that an SDRT charge is cancelled in certain circumstances where an instrument has been executed in respect of the transfer of securities. For the section to apply, the instrument must cover all the chargeable securities and either must be duly stamped or not be required to be stamped. If these conditions are met then the SDRT charge is cancelled and any SDRT that has been paid is repaid. Also see STSM142030)

This mechanism for cancelling SDRT is the way in which certain stamp duty reliefs are effectively extended to SDRT. Some reliefs, such as group relief (STSM042200), only appear in the stamp duty legislation. If the stamp duty relief applies then the potential SDRT charge is removed by virtue of section 92, thus effectively extending relief to SDRT.

There are certain circumstances in which the SDRT charge is retained even where the corresponding instrument is exempt from stamp duty (see FA86/S88).