STSM022240 - Scope of stamp duty on shares: stamp duty: adjudication, stamps and reliefs: Repurchases and Stock Lending
FA86/S80C provides relief from Stamp Duty, subject to certain conditions, where a person (A) has entered into an arrangement with another person (B) under which B is to transfer stock to A or his nominee and stock of the same kind and amount is to be transferred by A or his nominee to B or his nominee. The transfers to B (or his nominee) or to A (or his nominee) are not chargeable with Stamp Duty if the conditions set out below are fulfilled.
An arrangement does not qualify for relief if it is not such as would be entered into by persons dealing at arm’s length or any of the benefits or risks arising from fluctuations, before the transfer to B or his nominee takes place, in the market value of the stock, accrues to, or falls on, A.
The conditions
There are two alternatives, either;
1) That A or B
i) is authorised under the law of an EEA state or Gibraltar to provide any of the investment services, or activities, listed in Section 2 or 3 of Annex 1 to Directive 2004/39/EC of the European Parliament and Council (FA86/S80C(2A)(i)); or
ii) has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (FA86/S80C(2A)(ii)),
in relation to securities which are regularly traded on a regulated market,
2) Or that
i) the arrangement is effected on (i.e. subject to the rules of, and reported to) a regulated market, multilateral trading facility or recognised foreign exchange; and
ii) stock of the kind concerned is regularly traded on that market, facility or exchange.
Regulated market (FA86/S80B) means:
a) a UK regulated market, within the meaning of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (MiFIR);
b) an EU regulated market, within the meaning of that Regulation; or
c) a Gibraltar regulated market within the meaning given by Article 26(11)(b)(i) of that Regulation
Multilateral trading facility (FA86/S80B) means:
a) a UK multilateral trading facility, within the meaning of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments;
b) an EU multilateral trading facility, within the meaning of that Regulation; or
c) a Gibraltar multilateral trading facility within the meaning given by Article 26(11)(b)(ii) of that Regulation
Recognised foreign exchange (FA86/S80B(3) ) means:
a) a market which is not in the United Kingdom, Gibraltar or an EEA State; and
b) is specified in regulations made by the Treasury.
How to claim relief
Claims should be sent to HMRC Stamp Office together with evidence that the conditions of the relief have been met.