IFM41120 - Stamp Duty and SDRT: share and loan capital repurchases

Under the provisions of the Companies Act 2006, a UK incorporated company is obliged to make a return to the Registrar of Companies giving details of own shares purchased (CA06/S707). The return is made on an SH03 Form (issued by Companies House). Under CA06/S707 it is compulsory for a company buying its own shares to make a return to Companies House within the period of 28 days beginning with the date on which the shares are delivered to it.

FA86/S66 provides that the return form is treated as an instrument of transfer of the shares for Stamp Duty purposes and is chargeable with Stamp Duty. The Stamp Duty must be paid and the SH03 ‘duly stamped’ (see IFM41110) before it is submitted to Companies House. The Stamp Duty charge does not however apply to any instrument of transfer by which the company’s own shares are transferred to the company (FA99/SCH13(1)(4)).

The charge to SDRT is cancelled, provided that the return has been made as above and to the extent that Stamp Duty has been paid on it (FA86/S92(1C)).

The SH03 contains a self-certification exemption box for repurchases by QAHCs (see IFM41130).

See STSM075020 for further information on company purchases of own shares.

Loan capital exemption

FA86/S79 provides a general exemption from Stamp Duty for transfers of loan capital except for loan capital which is in some way equity-related, for example, convertible into equity or carrying a return related to the profits of a business.

See STSM041050 and STSM041060 for further information on the Stamp Duty loan capital exemption.

There is no Companies House form required to claim the loan capital exemption.