STSM101065 - Introduction to Collective Investment Schemes: Exchange Traded Fund: Stamp Duty and SDRT

Stamp Duty and Stamp Duty Reserve Tax (SDRT) apply in the normal way to acquisitions of securities by an Exchange Traded Fund (ETF). The manager or Trustee of the ETF may account for the duty or tax on behalf of the participants.

Under the Stamp Duty and Stamp Duty Reserve Tax (ETF) (Exemption) Regulations 2014:

• An agreement to transfer units in an ETF is not subject to a SDRT charge due to Regulation 3;

and

• An agreement which transfers units in an exchange traded fund is not subject to Stamp Duty due to Regulation 4

Where units in an ETF form the whole, or any part, of the consideration for the sale and transfer of stock or marketable securities, or an interest in a partnership holding stocks or marketable securities, the units are regarded as chargeable consideration for Stamp Duty and ‘money’s worth’ for SDRT charging purposes