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HMRC internal manual

Stamp Taxes on Shares Manual

Stamp duty and SDRT Administration: SDRT Administration: section 92 FA86 repayment or cancellation of tax

Agreement to transfer

Stamp Duty Reserve Tax (SDRT) is charged on an agreement to transfer chargeable securities whether the agreement is oral or in writing and whether or not the agreement has been completed.

If the agreement is completed by an instrument of transfer which is duly stamped then the SDRT charge is cancelled to the extent that SDRT has not already been paid (FA86/S92(3) - see STSM041050. Any SDRT which had been paid is repayable, provided that a claim for repayment is made within a period of six years from the date of the agreement to transfer (see STSM142110) or, if the agreement was conditional, the date the condition was satisfied (section 92(2)). Where the tax to be repaid is £25 or more, it is repaid with interest.


If A agrees to sell securities to a purchaser (B) who then agrees to sell them to another person (C) (a sub-purchaser) before B’s purchase has been completed, then there are potentially two charges to SDRT. If a paper transfer of the securities is made directly from A to C and is duly stamped it cancels only the SDRT on the agreement for the transfer to C. The purchase by the original buyer, B, will still give rise to a charge to SDRT. In other words, there is no “sub-sale relief” under the SDRT legislation.

Such dealing sequences can arise both within CREST (where typically two SDRT charges will be paid) or with residual securities (STSM142020). In the latter case it should be borne in mind that FA63/S67 prohibits circulation of blank stock transfer forms (not showing the name of the transferee). Where however a purchaser sells securities before the delivery of the stock transfer form the securities transferred can be delivered direct from the original vendor to C, with SDRT being paid by B and stamp duty being payable only on the consideration paid by the sub-purchaser C.