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HMRC internal manual

Stamp Taxes on Shares Manual

HM Revenue & Customs
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Depositary receipt and clearance services: alternative clearance service charge: introduction

An operator of a clearance service system can elect to be accountable for Stamp Duty Reserve Tax (SDRT) charges at the rate of 0.5 per cent (FA86/S87) on agreements to transfer ‘chargeable securities’ to, and within the system, rather than be liable for a 1.5 per cent charge, either as stamp duty or SDRT, on the transfer (on sale or otherwise than on sale) of the securities to the clearance service.

Pursuant to the provisions of FA86/S97A, an operator of a clearance service may, with the approval of the Commissioners for HM Revenue & Customs, elect for the alternative system of charge. Approval of such an election will effectively mean that the 1.5 per cent charges under FA86/S70 and FA86/S96, and the exemption from the general SDRT 0.5 per cent charge under FA86/S90 (4) and FA86/S90 (5) are disapplied.

The election facility is not however, available to depositary receipt issuers.

In broad terms, an approved election will mean that the principal 0.5 per cent SDRT charge (FA86/S87) will apply on agreements to transfer chargeable securities to, and within the clearance service system, but no 1.5 per cent charge will arise on the transfer otherwise than on sale, of such securities to the clearance service.

For the meaning of ‘chargeable securities’, see STSM053030.