HMRC internal manual

Stamp Taxes on Shares Manual

STSM042130 - Exemptions and reliefs: reliefs: stock lending and repurchase relief - general

Stock Loans

A market maker (principal broker dealer) or other recognised intermediary may have insufficient stocks and shares to fulfil an order to sell securities to another broker or investor. This may necessitate the borrowing of stocks and shares from other market institutions. In the absence of any relief, the lending of stock or chargeable securities to a borrower followed by the return of the same stock to the lender incurs a 0.5% stamp duty or Stamp Duty Reserve Tax charge on each leg; a cumulative charge of 1% on the two transactions.


A repo is much like a stock loan except that the transfer of securities in each direction is by way of sale; the arrangement is for the sale and repurchase of stock. The term repo embraces ‘delivery by value’ transactions under which a person lends money against a basket of securities short term, typically overnight. The securities are used as collateral for the cash loan. Similar to stock loan arrangements, in the absence of any relief the business of purchasing securities followed by the return of the securities to the borrower incurs a 0.5% charge on each leg; in effect a cumulative charge of 1% on the two transactions.