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HMRC internal manual

Stamp Taxes on Shares Manual

Depositary receipt and clearance services: scope of 1.5 per cent charge: Stamp Duty Reserve Tax - transfer from or within a 1.5 per cent clearance service

Where, at the time ‘chargeable securities’ are agreed to be transferred, the securities are held in a clearance service, the question on whether a charge to Stamp Duty Reserve Tax (SDRT) arises on the transfer is dependent on whether or not the clearance service has made an election under FA86/S97A .

  1. Where an operator of a clearance service has elected, under an approved arrangement with HM Revenue & Customs, Stamp Taxes, that the 1.5 per cent SDRT clearance service charge does not apply, an agreement to transfer ‘chargeable securities’ held by the clearance service will be subject to a 0.5 per cent SDRT charge by virtue of FA86/S87.

This is irrespective of whether upon delivery, the securities remain within the same clearance service, or are withdrawn from the clearance service system, or are delivered to another 0.5 per cent elected clearance service.

  1. If the operator of the clearance service has not made a section 97A election, no SDRT charge at the rate of 0.5 per cent under FA86/S87 (or 1.5 per cent under FA86/S93 or FA86/S96 ) arises on the trading of securities held in the clearance system ( FA86/S90 (4) to (6) )

This is irrespective of whether upon delivery, the securities remain within the same clearance service, or leave the clearance service system or are delivered to another 1.5 per cent clearance service or depositary receipt system.

See STSM058000 for the alternative clearance service charge (FA86/S97A).

See STSM057020 for transfers between depositary receipt and clearance service systems.

See STSM051020 for the meaning of depositary receipt.