- Following a 2020 call for evidence, on 27 April 2023, HMRC launched a consultation document inviting views on the details of modernising stamp taxes on shares. The previous government’s preference was for a single tax framework for listed and unlisted shares largely following the stamp duty reserve tax (SDRT) model for ‘paperless’ shares, leaving substantially intact the regime for listed shares (which are subject to SDRT). The only changes affecting listed shares might be technical ones required by the abolition of stamp duty, e.g. new freestanding exemptions for certain intra-group and fund transactions.
- For the transfer of unlisted shares, the landscape would change more radically as the tax would be on the purchaser (rather than an instrument), who would be required to report and pay the tax through a portal within 14 days, on a self-assessment basis.
- Special treatment would be allowed for unlisted shares where ‘necessary and appropriate’, for example allowing deferral of final payment of the charge where consideration is uncertain or contingent.
- The reform would include narrowing the scope of the tax so it only applies to shares (and equity like debt) in UK incorporated companies and, subject to anti-avoidance, ceases to apply to the grant of options and transfer of partnership interests.
- The Welsh government consulted in early 2024 on proposals to abolish land transaction tax (LTT) multiple dwellings relief (MDR) in Wales from 1 June 2024 and on changes to the so-called ‘six-pack rule’, such that an acquisition of six or more dwellings in a single transaction would be chargeable at the higher residential rates of LTT. Following responses to the consultation, which raised concerns about the impact on the housing supply and business, the Welsh government elected to retain MDR for now. However, they modified it so that it cannot be claimed on ‘subsidiary dwellings’ or dwellings contained within a principal dwelling that comprise less than a third of the value of the dwelling as a whole. Subsidiary dwellings are not treated as additional dwellings for LTT purposes, and the higher residential rates do not apply to purchases of properties containing them.
- At the Autumn Budget, the government confirmed that the sunsetting of the temporary residential rates of SDLT will go ahead as planned on 31 March 2025. For transactions in England and Northern Ireland with an effective date on or after 1 April 2025 the residential nil rate band will revert from £250,000 to £125,000, the First-time Buyers’ Relief nil rate band will revert from £425,000 to £300,000 and the maximum transaction value for First-time Buyers’ Relief will revert from £625,000 to £500,000.
- Timing: the consultation on the modernisation of stamp taxes on shares closed on 22 June 2023 but the timing of reform (if any) is yet unknown. The consultation was run by the previous government and it is yet unclear how the current government intends to proceed. The summary of responses to the Welsh government LTT consultation was published on 17 July 2024.
Resources (click to open)
- Explanatory Memorandum to The Land Transaction Tax (Modification of Relief for Acquisitions Involving Multiple Dwellings) (Wales) Regulations 2025 (Welsh government, January 2025)
- Written Statement: Land Transaction Tax Multiple-Dwellings Relief (14 January 2025) | GOV.WALES (Welsh government, January 2025)
- The Land Transaction Tax (Modification of Relief for Acquisitions Involving Multiple Dwellings) (Wales) Regulations 2025 (Welsh government, January 2025)
- Public consultation on land transaction reliefs (Welsh government, July 2024)
- Stamp taxes on shares modernisation (HMRC, consultation, April 2023)
