STSM031250 - Scope of Stamp Duty Reserve Tax (SDRT): Transfers of listed securities and connected persons: CREST reporting

Finance Bill 2018-19 introduces legislation to provide for a new Stamp Duty and Stamp Duty Reserve Tax (SDRT) market value rule where listed chargeable securities are transferred to a company or its nominee (whether or not for consideration), and the person transferring the securities is connected with the company or is the nominee of a person connected with the company.

When does the legislation take effect?

The change came into effect from 29 October 2018 and applies for the purposes of a 0.5% SDRT charge to an agreement to transfer ‘chargeable securities’ as defined in section 99 Finance Act 1986 which was entered into on or after 29 October 2018, and for a 1.5% SDRT charge where the transfer is on or after 29 October 2018. A similar change was made to Stamp Duty and applies to instruments executed on and after 29 October 2018.

CREST reporting

Where an agreement to transfer and delivery of listed securities to an acquiring connected company (or its nominee) is into a CREST standard member account, the ‘accountable person’ for SDRT must populate the CREST transaction Stampable Consideration field with the amount or value of the consideration or where this is lower, or no consideration is given, with the market value of the listed security. The transfer will attract SDRT at 0.5%.

Where a person (or their nominee) transfers UK incorporated company listed shares to a depositary receipt issuer (or its nominee) or to a clearance service (or its nominee) and the acquirer acts as nominee for a company connected with the deliverer of the shares, market practice is for the depositing member (i.e. the person delivering the shares) to account for SDRT at 1.5% on the delivery and transfer to the depositary bank or clearance service (or their nominees). In this situation the depositing member must populate the CREST transaction Stampable Consideration field with the amount or value of the consideration, or where this is lower, or no consideration is given, with the market value of the listed security.

STSM031210 explains the effective date when market value is to apply

STSM031220 explains the market value calculation

STSM031230 explains the meaning of listed securities

STSM031240 gives information on connected company and connected person(s)

STSM021305 gives information on Stamp Duty implications on transfers of listed stocks or marketable securities

STSM031090 gives the meaning of ‘chargeable securities’