Tax when you buy shares

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Buying shares electronically

You’ll pay Stamp Duty Reserve Tax (SDRT) if you buy shares electronically through the ‘CREST’ system (a computerised register of shares and shareowners).

The tax is taken automatically when you buy the shares, so you do not need to do anything else about your tax.

SDRT is charged at 0.5% when you buy shares electronically.

If you do not pay cash for your shares but give something else of value to buy them, you pay SDRT based on the value of what you gave.

If you’re given shares for nothing, you do not have to pay any tax.

Buying shares ‘off-market’

You must also pay SDRT on ‘off-market’ transactions. This is when shares are transferred outside CREST.

How to pay

Tax is not deducted automatically when you buy shares off-market.

You’ll need to send HM Revenue and Customs (HMRC) a written notice with details of the transaction.

If you do not pay on time, you’ll be charged interest from the due date until the date you pay. You may also get a penalty.