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HMRC internal manual

Stamp Taxes on Shares Manual

HM Revenue & Customs
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Partnerships: other partnership transactions: partnership acquisitions of stock or marketable securities

Where a partnership acquires securities from a non-partner (or from a person who does not, as a result of the transaction, become a partner in the firm) there is a potential charge to stamp duty or Stamp Duty Reserve Tax (SDRT) in the normal way at the rate of 0.5%. Where the securities are stock or marketable securities, there may be a charge to stamp duty under the provisions of FA99/SCH13/PARA1. Where the securities are chargeable securities, there may be a charge to SDRT under the provisions of FA86/S87.

Where the acquisition is of chargeable securities issued by a United Kingdom-incorporated company, the execution and stamping of a stock transfer form will cancel the liability to the SDRT charge that arises upon the agreement to transfer the securities (FA86/S92).

Stamp duty is a charge on instruments that transfer interests in stock or marketable securities. This covers:

  • instruments executed anywhere in the UK
  • instruments executed outside the UK that relate to UK property, or to ‘any matter or thing done or to be done’ anywhere in the UK

Foreign securities are therefore not exempted from stamp duty but in practice an instrument to transfer them would usually be executed and kept outside the UK and therefore not require stamping (SA1891/S14 (4)). SDRT does not apply unless the foreign company maintains a share register in the United Kingdom or the foreign shares are paired with shares in a United Kingdom company (see FA86/S99(4)).