- 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.
- 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.
Resources (click to open)
- Stamp taxes on shares modernisation (HMRC, consultation, April 2023)
