STSM011015 - Introduction to Stamp Duty on shares and Stamp Duty Reserve Tax (SDRT): Stamp Duty and SDRT basics: Stamp Duty- new method of stamping

2019 changes

The Stamp Duty (Method of Denoting Die) Regulations 2019 (SI 2019/ 719) made amendments to existing Stamp Duty legislation (for example section 27 Stamp Duty Management Act 1891) which allow HM Revenue & Customs (HMRC) to denote Stamp Duty by methods other than using impressed stamps.

These amendments include:

  • Replacing references to impressed stamps with references to stamps produced by means of a die; and
  • Extending the definition of “die” so that it includes any machine (so including a computer) used under the direction of the Commissioners of HMRC for denoting Stamp Duty.

2020 changes

The traditional Stamp Duty physical stamping processes are not compatible with the social distancing measures required to protect HMRC staff, and others involved in the process, from the transmission of Coronavirus (COVID-19).

Due to this, the Commissioners of HMRC directed an online system as a new die on 25 March 2020, the details of which were published on gov.uk

The main features of the new system are:

  • Transfer instruments (including form SH03 to record the purchase of own shares) are submitted to HMRC electronically
  • In place of a physical stamp on the transfer instrument, HMRC issues a letter confirming that duty has been paid or a claim for relief has been adjudicated

It is acceptable for instruments of transfer to be executed using an electronic signature and these would meet the definition of “an instrument under hand” for the purposes of the Stock Transfer Act 1963.

Instruments processed under this system are duly stamped for all purposes. There is no need for any such documents to be resubmitted for stamping under the traditional physical stamping system as such instruments will already be duly stamped.

Where customers are unable to submit electronically, an alternative postal option is available, details of which are also available on gov.uk. Such submissions will be scanned and HMRC will not retain the paper copy, so original paper documents should not be submitted in this way.