Business tax – guidance

Stamp Duty: reliefs and exemptions on paper shares

What to do if a transfer of shares is exempt from Stamp Duty and how you can claim a relief.

Overview

You usually need to pay Stamp Duty on the paper transfer of shares. There are some exceptions:

  • the transaction is exempt
  • the consideration you give is not a chargeable consideration
  • you are eligible for Stamp Duty relief

If your transaction is exempt or you don’t have a chargeable consideration, you don’t have to pay Stamp Duty and you don’t need to tell HM Revenue & Customs (HMRC) about it.

In some other circumstances you must notify HMRC, but you can claim a relief so you don’t have to pay Stamp Duty.

Transfers that are exempt

Some shares that you acquire are exempt from Stamp Duty because no consideration is given for them.

If a transfer of shares is exempt from Stamp Duty:

  • the transfer document doesn’t need to be stamped
  • you don’t need to send the documents to HMRC
  • there’s no Stamp Duty to pay

However you’ll need to complete the second exemption certificate on the back of the stock transfer form if a chargeable consideration of more than £1,000 is given for a transfer for which a specific exemption exists.

Some examples of transfers that are exempt include:

  • shares that you receive as a gift and that you don’t pay anything for (either money or some other consideration)
  • shares that your spouse or civil partner transfers to you when you marry or enter into a civil partnership
  • shares held in trust that are transferred from one trustee to another
  • transfers that a liquidator makes as settlement to shareholders when a business is wound up
  • shares held as security for a loan that are transferred back to you when you repay the loan
  • transfer to the beneficiaries of a trust when the trust is being wound up
  • shares that someone leaves to you in their will
  • shares transferred to you when you get divorced, or when your civil partnership is dissolved
  • certain types of loan capital

If you’re not sure whether your transaction is exempt from Stamp Duty, contact the HMRC Stamp Taxes Helpline.

What to do if transfers are exempt

If you give any consideration for the shares, you’ll need to fill in a stock transfer form showing details of the transaction. You’ll also need to fill in one of the certificates on the back of the stock transfer form.

You can buy a paper form from a legal stationer or download a copy from the internet. Send the completed form to the company registrar. You don’t need to send it to HMRC first.

Transfers that qualify for relief

There are some transfers that qualify for relief to reduce the amount of Stamp Duty due. Even if the relief is reduced to nil, you’ll still need to get the transfer document stamped.

Examples of common reliefs

Intra-group relief

Transfers of land or shares between companies in the same group can qualify for intra-group relief, so long as certain conditions are met.

Acquisition relief

When one company acquires all the shares in another company but the same people own both companies, you may be able to claim acquisition relief.

Reconstruction relief

There’s no Stamp Duty to pay when all or part of a company’s trade is transferred, as long as certain conditions are met. Find more on reconstruction relief.

Sales to intermediaries

There’s no Stamp Duty to pay when stock is transferred to a recognised intermediary.

Repurchases and stock lending

There’s no Stamp Duty to pay if transfers of stock meet certain conditions.

Transfers to charities

There’s no Stamp Duty to pay for transfers to charities as long as certain conditions are met.

How to claim relief

If you want to claim a relief from paying Stamp Duty, you’ll need to write to HMRC Birmingham Stamp Office, explaining why you want to claim it.

Enclose all the relevant transfer documents with your letter.

If HMRC confirms that relief is due, they’ll stamp your documents with a non-chargeable adjudication stamp. However, if HMRC tells you that relief isn’t due, you’ll need to pay the appropriate amount of stamp duty so that the transfer document can be stamped.

If you don’t claim the relief you’ll have to pay the Stamp Duty in full.

Further information

HMRC also has guidance on reliefs and exemptions for Stamp Duty Reserve Tax on electronic and paperless stock transactions and Stamp Duty Land Tax for land transfers made after December 2003.

Help and advice

You can contact the HMRC Stamp Taxes Helpline if:

  • you’re not sure whether your transaction is exempt from Stamp Duty
  • you need help in deciding whether you can claim a Stamp Duty relief