- Following consultation in 2023, the government intends to replace the current two stamp taxes on shares (stamp duty and stamp duty reserve tax (SDRT)) with a mandatory, single self-assessed 0.5% tax on securities. Draft legislation has now been published for consultation for the introduction of the new tax, Securities Transfer Tax (“STT”). The technical consultation closes on 7 September 2026.
- The reporting and paying of the tax, as well as the making of any claims for relief, will be via an online portal to be developed by HMRC (or under the existing CREST system for electronic transfers).
- Under the new tax, the purchaser will generally be deemed the liable person, although agents acting on behalf of the purchaser may also have some obligations, for instance, to make sure the transaction is reported.
- The new tax allows for different payment deadlines for transfers carried out in electronic settlement systems (14 days) and those taking place outside of electronic settlement systems (30 days). Deferral applications will be permissible for transactions involving contingent or uncertain consideration.
- The group relief, share for share relief, and reconstruction reliefs currently available within the stamp taxes framework will be retained in the new tax, although there may be differences in the conditions under the new legislation.
- The government has separately published its response to a consultation on modernising the 1.5% charge regime. The purpose of this consultation was to clarify and simplify the legislation in relation to the 1.5% charge, and in particular removing certain unnecessary or obsolete legislation.
- Provisions addressing the 1.5% charge, or higher rate as it will be known under STT, on transactions involving clearance services and depositary receipt systems are included within the draft legislation.
- Transitional provisions are currently expected to apply until 2031.
- Timing: the government is aiming to introduce STT and the new digital service in 2027 — an update on the commencement date will be provided in the Autumn.
Resources (click to open)
- Securities Transfer Tax — modernisation of the Stamp Taxes on Shares Framework (HMRC, July 2026)
- Modernisation of Stamp Taxes on Shares Framework: 1.5% charge (HMRC, consultation response, July 2026)
- Modernisation of the Stamp Taxes on Shares Framework – Summary of responses (HMRC, April 2025)
- Modernisation of the Stamp Taxes on Shares Framework – 1.5% charge (HMRC, April 2025)
- Consultation: Stamp taxes on shares modernisation (HMRC, April 2023)
