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HMRC internal manual

Stamp Taxes on Shares Manual

Bearer Instruments: Bearer Instrument duty - exemptions: stock exempt from stamp duty on transfer

For the purposes of a charge to bearer instrument duty, stock includes securities and any interest in, or in any fraction of, stock, or in any dividends or other rights arising out of stock and any right to an allotment of or to subscribe for stock.

By virtue of FA99/SCH15/PARA14 however, there is no 1.5 per cent stamp duty charge on a bearer instrument constituting or used for transferring stock (other than units in a unit trust) if that stock is itself exempt from all stamp duties on transfer. Stock considered exempt will include unsecured loan capital, bonds, Government stocks, local authority stocks etc.

Similarly, the provisions of FA86/S99 (5) will normally disapply a charge to Stamp Duty Reserve Tax (SDRT) on a bearer instrument constituting or used for transferring stock, if the stock is a security the transfer of which is exempt from all stamp duties. But a SDRT charge can be imposed in certain circumstances as explained in STSM067000

The Glossary at STSM999999 provides information as to the meaning of ‘loan capital’ and ‘bond’.