ATXP6 UK
Syllabus A5. Stamp Taxes A5b. Liabilities arising on transfers

A5bi. Shares and securities

Syllabus A5bi)

Advise on the stamp taxes payable on transfers of shares and securities

Stamp Duty

Shares and securities

This is payable by the purchaser on the purchase/transfer of shares and securities when transferred by a stock transfer form. 

It is not payable on newly issued shares

  1. Stamp duty is payable at 0,5% of the purchase price unless the transfer is covered by one of the exemptions.

  2. The amount payable is always rounded up to the nearest £5 and is charged on the date of the transfer form.

Stamp Duty Reserve Tax

Where shares and securities are transferred without a written document Stamp Duty Reserve (SDRT) applies instead. 

There is no charge if the consideration is £1,000 or less. 

This is normally:

  • Charged at the rate of 0,5% of the consideration payable for the shares/securities.

  • Rounded up to the nearest pence

  • Levied on the date of the agreement

Note

If there is no consideration in money or money’s worth then there is usually no SDRT.

Securities admitted to trading on a recognised growth market (eg AIM) but not listed on that or any other market are exempt from SDRT.

Illustration

Harry had the transactions in 2018/19:

a) purchases 5,000 shares in a quoted company for £10,000
b) received 8,000 Q Plc shares from his uncle as a gift

What stamp duty/stamp duty reserve tax is payable?

  • Solution

    a) 0.5% * £10,000 = £50
    b) Nil – there is no SD payable on the gift of shares as there is no monetary consideration