STSM061060 - Bearer instruments: introduction:2024 changes

Following EU and UK court decisions in 2009 and 2012, HMRC recognised that the 1.5% Stamp Duty and SDRT charges on the issue of bearer instruments were incompatible with the Capital Duties Directive (Council Directive 2008/7/EC of 12 February 2008 concerning indirect taxes on the raising of capital, and the predecessor directive, Council Directive 69/335/EEC of 17 July 1969).

UK legislation providing for the charge on these types of transactions was not amended as taxpayers were able to rely on the direct effect of EU law up to and including 31 December 2023.

However, the changes in the Retained EU Law (Revocation and Reform) Act 2023 meant that this would no longer be the case, so UK legislation was amended with effect from 1 January 2024 to prevent the 1.5% charge being reintroduced on the issue of bearer instruments.

The amendments remove Paragraph 1 of Schedule 15 FA1999 (the charge on the issue of a bearer instrument) and makes consequential changes to Schedule 15 FA1999, section 79(2) FA1986 (loan capital exemption), section 131(3) FA1976, section 126 FA1984, section 50 FA1987 and section 143 FA1988.