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HMRC internal manual

Stamp Taxes on Shares Manual

Depositary receipt and clearance services: exemptions/ reliefs: transfers to depositary receipt issuers and unelected clearance services

The provisions of FA86/S90 (4) ensure that the principal Stamp Duty Reserve Tax (SDRT) charge under FA86/S87 at the rate of 0.5 per cent does not arise on the transfer (on sale or otherwise on sale) of chargeable securities to a depositary receipt issuer (or its nominee) or clearance service (or its nominee), if there is a 1.5 per cent charge on that transfer.

The provisions of FA86/S90 (4) only apply, however, where an immediate prior purchase of securities is undertaken with the specific intention that the securities be simultaneously transferred and deposited, in pursuance of an arrangement, with a depositary receipt issuer or clearance service.

The CREST publication ‘A Guide to Market Practice - Stamp Duty Reserve Tax’ outlines the process by which a CREST Transaction Stamp Status value ‘T’ (No SDRT liability - SDRT paid inside CREST on another CREST transaction) can be used by CREST participants and members to process such transactions.

For the meaning of ‘chargeable securities’, see STSM053030