Stamp Duty Reserve Tax

Stamp Duty Reserve Tax (SDRT) is a tax on shares and securities which are purchased via the stock market or a stockbroker using paperless transactions.

The standard rate of SDRT payable on the purchase price (or consideration) of shares is 0.5%. A higher 1.5% Stamp Duty or SDRT rate can apply in certain circumstances where shares or other securities are transferred overseas.

SDRT is usually payable on paperless transactions when you buy:

• Shares in a UK company
• Shares in a foreign company with a share register in the UK
• An option to buy shares
• Rights arising from shares already owned
• An interest in shares, like an interest in the money made from selling them.

There are penalties for missing a notification or payment deadline. The penalty regime starts from the day after the notification deadline date with an initial penalty of £100. Further penalties will become due if the delays continue.

A consultation on the Modernisation of the Stamp Taxes on Shares Framework recently closed. It built on a previous consultation dating back to April 2023 that examined modernising the main 0.5% Stamp Taxes on Shares charge. This latest consultation focused on updating the 1.5% higher rate charge on certain transfers of UK securities overseas, aiming to simplify the rules and improve clarity. Further details are expected to be published in the coming months.

If you need tax advice, give our expert and friendly team a call on 01380 723692 or email us here.