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HMRC internal manual

Stamp Taxes on Shares Manual

HM Revenue & Customs
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Depositary receipt and clearance services: scope of 1.5 per cent charge: Stamp Duty Reserve Tax - secondary trading of rights and delivery of an allotment letter or renounceable letter of allotment

The purchase and transfer of rights to a nil paid letter of allotment (AL) or Renounceable Letter of Allotment (RLA) (whether nil, partly, or fully paid) in the secondary market followed by a simultaneous issue of a new (nil, partly or fully paid) AL or RLA by a company incorporated in the United Kingdom with a depositary receipt issuer or clearance service (located within or outside of the European Union/European Economic Area) can be subject to a Stamp Duty Reserve Tax (SDRT) charge.

In such circumstances, the SDRT charge at the rate of 1.5 per cent is calculated by reference to the consideration paid for the rights transferred and acquired. See FA86/S93 (4)(b) and FA86/S96 (2)(b).

See STSM055030 for the meaning of an allotment letter and a renounceable letter of allotment.