STSM031160 - Scope of Stamp Duty Reserve Tax (SDRT): reliefs and exemptions

Examples where the principal 0.5% SDRT charge under FA86/S87 does not apply include:

  • securities the transfer of which is exempt from all stamp duties (FA86/S99(5) & (5ZA)), and rights and interests relating to such securities e.g. loan capital exempt under FA86/S79(4) and government stocks (gilts).
  • securities which are not chargeable securities. This includes:
    • securities outlined in FA86/S99(4) – non-UK incorporated companies with no UK share register,
    • (4B) – securities admitted to trading on a recognised growth market,
    • (5A) – unit trusts schemes where the trustees of the scheme are resident outside of the UK
  • transfers of securities to a depositary receipt issuer or operator of a clearance service (or to their respective nominees) which are otherwise subject to a 1.5% SDRT charge (FA86/93 & FA86/S96);
  • subsequent transfers of securities within a 1.5% clearance service (FA86/S90(4) & (5)); interests in depositary receipts (FA86/S99(6));
  • transfers of securities between two (unelected) clearance services (FA86/S97(1)) or between two depositary receipt systems (FA86/S95(1)).

More information on exemptions applying to depositary receipt issuers and clearance services is at STSM057000.

  • transfers of securities to a depositary under an Authorised Contractual Scheme (ACS), in exchange for the issue of units in the scheme (and for no other consideration);

  • transfers between depositaries under the same ACS; and

  • agreement to transfer units in an ACS to a third party purchaser for consideration in money or money’s worth (FA86/S90(7B)).

  • transfers of units under a unit trust scheme to or from the manager under the scheme (FA86/S90(1)).
  • agreements to transfer shares and securities to charities and certain other institutions (FA86/S90(7))
  • purchases of chargeable securities by an intermediary (FA86/S88A)
  • investment banks acting as principal in public issues (FA86/S89A)
  • stock lending transactions. (FA86/S89AA)

In addition, SDRT does not in practice arise on options or futures dealt in on ICE Futures Europe in the form of traded put or call options (as the writing or grant of such an option does not constitute a transfer).

Secondary trading of an equity option before its expiry can lead to a SDRT charge dependent on the terms of the option.

Moreover the exercise of an option and transfer/delivery of the underlying UK registered shares will give rise to SDRT (0.5%, or 1.5% if delivered to a depositary receipt issuer or clearance service (or their respective nominees)), if no written instrument or document is executed upon which ad valorem Stamp Duty is paid and impressed thereon..