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HMRC internal manual

Stamp Taxes on Shares Manual

HM Revenue & Customs
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Stamp duty and SDRT Administration: SDRT Administration: sub-sales (SDRT)


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 Stamp Duty Reserve Tax (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.