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HMRC internal manual

Stamp Taxes on Shares Manual

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HM Revenue & Customs
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Depositary receipt and clearance services: calculation of 1.5 per cent Stamp Duty/Stamp Duty Reserve Tax charge: 1.5 per cent Stamp Duty - calculation

A transfer on sale of relevant securities of a United Kingdom incorporated company to a depositary receipt issuer (or to its agent or nominee) or clearance service (or to its agent or nominee) is chargeable, under the provisions of FA86/S67 (2), FA86/S70 (2) and FA99/S112 (1)(b), with stamp duty at the rate of 1.5 per cent. The duty is rounded up to the nearest higher multiple of £5 if not exactly divisible by £5, calculated by reference to the amount or value of the consideration for the sale to which the instrument gives effect.

If the transfer is otherwise than on sale (i.e. the transferor is merely transferring his legal ownership of relevant securities to a clearance service or to a depositary receipt issuer in exchange for a depositary receipt), duty at the rate of 1.5 per cent, rounded up to the nearest higher multiple of £5 if not exactly divisible by £5, is calculated by reference to the market value of the securities at the date the instrument is executed by virtue of FA86/S67 (3), FA86/S69 (4), FA86/S70 (3) and FA86/S72 (2).

As with stamp duty generally, a 1.5 per cent depositary receipt or clearance service charge does not apply to newly created shares and bearer instruments, or to bonus shares that are issued to a depositary receipt issuer or clearance service.

For the meaning of ‘relevant securities’, see STSM053020.

See STSM057040 for the meaning of bonus shares.

See STSM060000 for the meaning of bearer securities.