Stamp Taxes - Customer Newsletter - Stamp Duty Reserve Tax (SDRT)

July 2002 issue number 1

Background

Stamp Taxes have been reviewing its procedures with regard to the way it administers the SDRT environment. As a consequence of the review, they will be introducing changes within the repayments process as well as implementing new assurance procedures.

Repayments

In the past, CREST participants have been aware that detailed checks have been undertaken by SDRT Operations Unit on all repayment claims submitted to check the validity of the claim. Whilst the new procedures will include verification of all transactions it will only include a detailed post-payment check on a sample of the claims received. This will mean that all valid transaction IDs will be repaid immediately upon receipt, on a without prejudice basis. SDRT Operations Unit does, however, reserve the right to contact customers at a later date (usually within 60 days of the claim date) to request additional supporting material where necessary.

Where a CREST participant "input "error has led to an erroneous SDRT charge, customers are requested to submit the following information to SDRT Operations Unit (Worthing) for reclaim purposes:-

• Crest Transaction ID ( not the STP transaction ID )
• Individual SDRT claim amounts
• Trade Date
• Repayment Code 1 - 11

If multiple transactions are in point, the above information should be supplied on a disk (in excel format).

The provision of this information will allow SDRT Operations Unit to check payment details against CREST data held and create a database of circumstances that cause repayments to arise. The Unit will then seek to identify solutions to reduce common recurrent error types.

Assurance testing

CREST participants are aware that the SDRT Assurance Team undertakes periodic audit visits to review a sample of transactions back to source data. SDRT Operations Unit will in future supplement the work carried out by Assurance and begin to undertake small sample checks on various transactions input to CREST. These will include SDRT exemption categories to ensure that adequate documentary evidence is being maintained. It is appreciated that this may cause additional work to participants, but this will be kept to a minimum.

Cheque and Chaps payments received in SDRT Operations Unit

With immediate effect, SDRT Operations Unit will be requesting customers provide full information pertaining to their cheque or Chaps payment. This will include the following:-

• Trade Date
• Names of the parties concerned
• Description and number of securities
• Consideration paid
• SDRT due
• The full facts and circumstances/reasons as to why the tax has been accounted for in cheque/chaps form as opposed to being settled through CREST.

The provision of this information will allow SDRT Operations Unit to check payment details and create a database of circumstances that cause payments to be made. The Unit will then seek to identify solutions to reduce common recurrent error types.

All enquiries surrounding the content of this Newsletter are to be addressed to:-

Stamp Taxes
SDRT Operations Unit
Room 5 East Block
Barrington Road
Worthing
West Sussex
BN12 4SE

Telephone: 01903 509928 or 01903 509469

Please note change of address

From 17 November 2006, all enquiries should be sent to:

Birmingham Stamp Office
SDRT Team
9th Floor
City Centre House
30 Union Street
Birmingham
B2 4AR

Telephone: 0845 603 0135
Fax: 0121 633 3921

Repayment Codes - exemption applicable

Code	Explanation
1	NCBO
2	Charity
3	Intermediary Relief (Principal purchase)

Repayment Codes - CREST inputs incorrect or missing

Code	Explanation
4	TSS flag (identify flag applicable)
5	TSO/Stock Lending Relief
6	Market Sale/ADR conversion back to underlying shares
7	Stampable consideration
8	Agent indicator

Repayment Codes - Double SDRT payments made

Code	Explanation
9	Cancelled/Rebooked or duplicated trades
10	Bulk/Splits, paid both in and outside of CREST, paid by both parties

Repayment Codes - Others

Code	Explanation
11	Other reasons not listed