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HMRC internal manual

Stamp Taxes on Shares Manual

HM Revenue & Customs
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Exemptions and reliefs: reliefs: Intermediary Relief (FA 1986 sections 80A & 88A) - general

Relief from stamp duty and Stamp Duty Reserve Tax (SDRT) is available to persons (including market maker principal brokers) who provide liquidity in the financial markets by being available to buy securities from individuals and other professional corporate bodies. Because they are obliged to deal when requested to do so, stamp duty and SDRT relief is available on all their share purchases. Such persons are described by the legislation as ‘intermediaries’. The relief extends to options intermediaries, i.e. persons who provide liquidity by dealing in options.

The legislation is at FA86/S80A (stamp duty) and FA86/S88A (SDRT). Section 80A provides that no stamp duty is payable on an instrument which transfers stock to an intermediary; section 88A provides that no SDRT is chargeable on an agreement to transfer securities to an intermediary.

A number of conditions must be fulfilled to qualify as an intermediary. A person:

  • must be a member of one of a regulated market, or a multilateral trading facility (MTF) or a recognised foreign exchange;
  • must carry on a bone fide business of dealing in equities/options; and
  • must not carry on an excluded business.

With effect from 1 November 2007, it is also possible for a person who is not a member of a regulated market, MTF or recognised foreign exchange but nevertheless is authorised under the law of an EEA state to execute orders on behalf of clients or deal on own account to apply for intermediary status by making application direct to HMRC Stamp Taxes - SDRT Operations.