Derivatives: introduction to contracts for difference: contracts for difference - stamp implications
As the issue or closure of a Contract for Difference (CFD) does not involve the purchase of a ‘chargeable security’ there is no Stamp Duty Reserve Tax (SDRT) liability.
Equally, the purchase of underlying securities i.e. stocks and shares, to hedge the issue of a CFD by the issuing CFD provider will not be subject to a charge to SDRT or stamp duty if the issuing provider is recognised as an intermediary eligible for stamp duty and SDRT relief purposes.
See STSM118030 for the meaning of hedging a CFD.
See STSM031090 for the meaning of chargeable securities.
See STSM042050 for the meaning of an intermediary.