This guide explains which paperless transfers are exempt. It also tells you when and how you can get SDRT relief. It doesn't cover exemptions and reliefs for transfers of shares to which Stamp Duty applies - but it does provide links to guidance on this.
On this page:
Paperless transfers of stocks, shares and other securities are exempt from SDRT (there is no tax to pay) if they are one of the following:
If you're not sure whether your transaction is exempt from SDRT, you can contact the HM Revenue & Customs (HMRC) SDRT Helpline.
You don't need to tell HMRC about exempt off-market transfers. However, you'll need to keep all the relevant documents so that if HMRC asks you can demonstrate why SDRT wasn't due. HMRC can ask to see proof that the transfer was exempt for up to six years after the transaction date.
For electronic transfers using CREST - the electronic shares settlement and registration system - you'll need to apply the appropriate CREST Transaction Status flag. See the later section on 'How to claim a Stamp Duty Reserve Tax relief or exemption'.
There are some transactions that qualify for relief. As with exemptions, this means there's no SDRT due.
The following are the most common reliefs you can claim:
In some cases you can't claim SDRT relief directly but will need to claim Stamp Duty relief instead.
This applies to:
If you want to claim either of these reliefs you'll need to send your documents to HMRC for stamping. If HMRC accepts your claim for relief from Stamp Duty and the documents are stamped, you won't have to pay SDRT either.
How to get paper stock transfer documents stamped
This isn't an exhaustive list of the SDRT reliefs available. You can find out more about the reliefs you can claim in Chapter 6 of the HMRC publication 'Stamp Taxes Manual'.
Download the HMRC publication, 'Stamp Taxes Manual' (PDF 2.2MB)
If you need help in deciding whether you can claim a SDRT relief you can contact the HMRC SDRT Helpline.
In most cases you don't need to do anything to claim relief from SDRT. But you must keep any supporting evidence to show HMRC that the relief was applied correctly if they question it in the future.
If you're claiming an SDRT relief or exemption for a share transaction made through CREST, you'll enter a specific code - the 'Transaction Stamp Status (TSS) flag' - along with details of the transaction. When the relevant TSS flag is entered into the system, the relief is given automatically. If you're transferring shares on your own account your stockbroker will enter the appropriate flag into CREST.
Each TSS flag consists of a capital letter or a number and is associated with a particular relief. You can see the most common TSS flags in the table below.
| TSS flag | Stamp Duty Reserve Tax relief/exemption |
|---|---|
| O | Transfer to/from a nominee, with no change of beneficial owner, or transfer between nominees of the same beneficial owner. |
| S | Transfer to exempt charity. |
| T | SDRT paid through CREST on another CREST transaction. |
| U | Stamp Duty paid outside CREST on a physical document (including form 169), or SDRT paid (or to be paid) outside CREST on a corporate action. |
| W | Issuing house exemption on new issue. |
| 3 | Intra-group transfer, a letter of direction having been executed. |
| 4 | Stock loan return or transfer of delivery-by-value collateral relating to loans. |
| 5 | Letter of direction has been executed (including pension scheme mergers, purchase of life insurance policies and transfers by way of security for loans). |
| 6 | Authorised unit trust merger or authorised unit trust/open-ended investment company conversion or amalgamation. |
| 7 | Stamp liable outside the UK. |
You'll need to keep records so that if HMRC asks, you can show them why the transaction was flagged for relief.
If you don't claim a relief you'll have to pay the SDRT in full.
If you are the 'accountable' person for SDRT purposes and you buy shares on behalf of a fund or investment manager acting on behalf of a charity that is exempt from SDRT you will need to enter ‘S’ as the TSS Flag, If your client has an agreement with HMRC not to have to provide you with full details about the charity then you will need to enter your client’s rather than your own reference number into CREST.
View a list of HMRC fund manager
charity reference numbers
To find out more about the process and evidence required when buying shares directly or indirectly on behalf of an exempt charity follow the link below.
Process and required evidence when buying shares on behalf of an exempt charity
If you apply a relief incorrectly and don't pay any SDRT you may have to pay a penalty and interest. This is because you won't have paid the correct amount of SDRT by the due date. You can find out more about penalties and interest by following the link below.
Penalties and appeals - Stamp Duty Reserve Tax
Download the HMRC publication, 'Stamp Taxes Manual' (PDF 2.2MB)
You can find out more about Stamp Duty reliefs and exemptions on paper stock transactions by following the link below.
