In some situations you don't have to pay Stamp Duty on paper transfers of shares. This is because either the transaction is exempt, the consideration you give is not chargeable consideration or because you can get Stamp Duty relief.
If the transfer is exempt or the consideration you give is not chargeable consideration there’s no Stamp Duty to pay and you don't need to tell HM Revenue & Customs (HMRC) about it.
In some other circumstances you must notify HMRC but you can claim a relief so you don't have to pay Stamp Duty.
This guide explains what to do if a transfer of shares is exempt from Stamp Duty. It also tells you how to claim a relief. It doesn't cover exemptions and reliefs for Stamp Duty Reserve Tax or Stamp Duty Land Tax - but it does provide links to guidance on this.
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Usually you pay Stamp Duty when you buy shares using a paper method.
Some shares that you acquire are exempt from Stamp Duty because no consideration is given for them, others are exempt because of a specific exemption.
If you do not give any consideration for a transfer no Stamp Duty is payable. Some examples include:
There are specific exemptions in legislation for the following:
If a transfer of shares is exempt from Stamp Duty:
However where chargeable consideration of over £1,000 is given for a transfer for which a specific exemption exists you will need to complete the second exemption certificate on the back of the stock transfer form.
If you're not sure whether your transaction is exempt from Stamp Duty, you can contact the HMRC Stamp Taxes Helpline.
You'll need to complete a stock transfer form showing details of the transaction - including the certificate on the back of the form if you give any consideration for the shares. You can buy a paper form from a legal stationer or download a copy from the internet. Send the completed form to the company registrar - you don't need to send it to HMRC first.
There are some transfers that qualify for relief to reduce the amount of Stamp Duty due - to nil in most cases. But you'll still need to get the transfer document stamped.
The following are some of the most common reliefs you can claim:
This isn't an exhaustive list of the Stamp Duty reliefs available. You can find out more about the reliefs you can claim in Chapter 6 of the HMRC publication 'Stamp Taxes Manual'.
If you need help in deciding whether you can claim a Stamp Duty relief you can contact the HMRC Stamp Taxes Helpline.
If you want to claim a relief from paying Stamp Duty, you'll need to write to HMRC Birmingham Stamp Office explaining why you want to claim it. Enclose all the relevant transfer documents with your letter.
If HMRC confirms that the relief is due, they'll stamp your documents with a non-chargeable adjudication stamp.
If HMRC tells you that relief is not due, you'll need to pay the appropriate amount of stamp duty so that the transfer document can be stamped.
If you don't claim the relief you'll have to pay the Stamp Duty in full.
Follow the links below to find out more about: