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HMRC internal manual

Stamp Taxes on Shares Manual

HM Revenue & Customs
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Exemptions and reliefs: reliefs: stamp duty group relief - SDRT implications

There is no equivalent to stamp duty group relief under the Stamp Duty Reserve Tax (SDRT) legislation. Stamp duty relief under FA30/S42, however, has the effect of cancelling an SDRT charge under the provisions of FA86/S92. In order to avoid an SDRT charge arising on an intra-group transaction, it may be necessary to execute an appropriate letter of direction in respect of which a section 42 stamp duty relief claim can be made.

Where the transfer on sale of stock or marketable securities between two associated corporate bodies is undertaken and settled in CREST, there will be an SDRT charge under FA86/S87. Where, however, a CREST Participant (i.e. the SDRT accountable person) receives written confirmation before the securities are transferred and settled in CREST that an appropriate letter of direction has been executed by the transaction parties to reflect the movement of stock and which will be presented to HMRC Stamp Taxes, along with a section 42 stamp duty relief claim, the CREST Participant may input CREST Transaction Stamp Status value 3 which will effectively cancel the SDRT obligation.

If the stamp duty relief claim is unsuccessful and ad valorem stamp duty is not paid and impressed on the letter of direction, then the SDRT charge must be paid, with interest being charged where payment of the tax has not been received on or by the accountable date.