UK Act of Parliament 1986 United Kingdom

Finance Act 1986 (Part IV - Stamp Duty Reserve Tax)

What this means for your business

3 obligations
2 penalties
1 guides
Enforced by
HMRC
Applies to
United Kingdom
On this page
3 compliance obligations, 1 practical guide
Read full text on legislation.gov.uk

What you must do

3 compliance obligations under this legislation.

Notifications 2

Notify HMRC of any depositary receipt activity

Fine up to £1,000

If your business issues depositary receipts, holds UK company securities as a nominee or agent for an issuer, or you become aware that a UK company's shares are held by such a person, you must tell HMRC (the Commissioners) within one month of the first occurrence. Failure to do so can result in a fine of up to £1,000.

Trader/Business s.68 HMRC when you issue depositary receipts, act as a nominee/agent holding relevant UK …

Notify HMRC of clearance services or relevant shareholdings

Fine up to £1,000

If your business provides clearance services for UK‑company shares, holds those shares as a nominee/agent for a clearance‑service provider, or your company discovers that its shares are held by such a person, you must inform HMRC. The notification must be sent within one month of the first time you start the service, first hold the securities, or become aware of the shareholding.

Any Person s.71 HMRC When you first provide clearance services, first hold relevant securities as a …

Payments and fees 1

Pay Stamp Duty Reserve Tax on relevant agreements

If you are the party (referred to as “B”) to an agreement that falls under Section 87 of the Finance Act 1986, you must pay any Stamp Duty Reserve Tax (SDRT) that is charged on that agreement. In practice this means you need to calculate, report and settle the tax with HMRC whenever such an agreement is entered into.

Trader/Business s.91 HMRC When an agreement is subject to tax under Section 87 (e.g., stock‑lending …

Penalties for non-compliance

2 penalties under this legislation.

Fine

Notify HMRC of any depositary receipt activity

Fine up to £1,000

Summary only s.68 Penalises: Notify HMRC of any depositary receipt activity
Fine

Notify HMRC of clearance services or relevant shareholdings

Fine up to £1,000

Summary only s.71 Penalises: Notify HMRC of clearance services or relevant shareholdings

Practical guidance

Our guides explain how to comply with the requirements above.

Pay stamp duty on shares

How to pay stamp duty or SDRT when buying UK company shares, including rates, exemptions, and the stamping process.

Sections and provisions

117 classified provisions from this legislation.

3 Duties 5 Powers 14 Definitions 32 Exemptions

Duties 3

  • s.68 Depositary receipts: notification
  • s.71 Clearance services: notification
  • s.91 Liability to tax

Powers 5

  • s.69 Depositary receipts: supplementary
  • s.92 Repayment or cancellation of tax
  • s.94 Depositary receipts: supplementary
  • s.98 Administration etc.
  • s.104 Regulations for avoiding double charges etc.

Definitions 14

  • s.4 Beer duty: minor amendments.
  • s.7 Betting and gaming duties: evidence by certificate, etc.
  • s.72 Clearance services: supplementary
  • s.72ZA Meaning of “exempt capital-raising instrument” capital-raising arrangements
  • s.72ZB Meaning of “exempt listing instrument” listing arrangements
  • s.77A Disqualifying arrangements relevant merger arrangements the acquiring company the target company
  • s.80A Sales to intermediaries. relevant qualifying exchange
  • s.80B Intermediaries: supplementary. the Directive insurance business multilateral trading facility
  • s.88B Intermediaries: supplementary. the Directive insurance business quoted or listed options
  • s.97AC Exempt listing transfers listing arrangements
  • s.99A Section 99(4B): “listed” and “recognised growth market” Recognised growth market The qualifying period recognised stock exchange
  • s.99 Interpretation The Board chargeable securities newly subscribed shares
  • s.105 Application of business and agricultural relief where transfer partly exempt. the appropriate fraction the unreduced value transferred
  • s.108 The on-shore/off-shore boundary. the landward boundary of the territorial sea the shoreline of the United Kingdom the enactments relating to oil taxation

Exemptions 32

  • s.8 Licences under the customs and excise Acts.
  • Schedule 20 GIFTS WITH RESERVATION
  • s.66 Company's purchase of own shares
  • s.67 Depositary receipts 1.5% charge
  • s.70 Clearance services 1.5% charge
  • s.72A Transfers between depositary receipt system and clearance system.
  • s.75 Acquisitions: reliefs.
  • s.77 Acquisition of target company's share capital
  • s.78 Loan capital.
  • s.79 Loan capital: new provisions.
  • s.80C Repurchases and stock lending.
  • s.85 Supplementary
  • s.88 Special cases.
  • s.88A Section 87: exceptions for intermediaries.
  • s.89 Section 87: exceptions for market makers etc.
  • s.89AB Section 87: exception for repurchases and stock lending in case of insolvency
  • s.89AA Section 87: exception for repurchases and stock lending.
  • s.89A Section 87: exceptions for public issues.
  • s.89B Section 87: exceptions for stock lending and collateral security arrangements.
  • s.90 Section 87: other exceptions
  • ... and 12 more exemptions