STSM011080 - Introduction to Stamp Duty on shares and Stamp Duty Reserve Tax (SDRT): Stamp duty and SDRT basics: Abolition Legislation in place

Sections 107-111, Finance Act 1990 provide for the abolition of Stamp Duty (SD) on instruments transferring interests in stock or marketable securities and Stamp Duty Reserve Tax on agreements to transfer chargeable securities from a date determined by Treasury order made by Statutory Instrument.

The legislation was enacted to allow easier development of the London Stock Exchange’s planned introduction of paperless trading through the TAURUS system in that software design would not need to include any provision for SD or SDLT. It was intended that the abolition would take place on the day the TAURUS system went live, but on 11 March 1993 it was announced that TAURUS had been abandoned.

Since that time the CREST system has been developed which does account for SDRT. The legislation for abolition nevertheless remains in place and has been incorporated in subsequent legislation, notably the reforms introduced by Finance Act 1999.