STSM011010 | Introduction to Stamp Duty on shares and Stamp Duty Reserve Tax (SDRT): Stamp Duty and SDRT basics: what is Stamp Duty?

Stamp Duty is charged on instruments that transfer an interest in property. It used to apply to many different types of property but is now limited to the transfer of stock or marketable securities (see STSM021040), the transfer of partnership interests where the partnership assets include stock or marketable securities (see STSM091050), instruments giving effect to land contracts entered into on or before 10 July 2003 (see STSM011030) and certain other instruments dated prior to 1 December 2003 (see STSM011040).

Whether a Stamp Duty charge arises depends on the legislation in place at the date of execution of the instrument. Where an instrument is chargeable, there is no provision for the duty to be collected by assessment or for payment to be specifically enforced. But for most legal and registration purposes an instrument must be stamped to have any validity. Traditionally, physical stamps impressed on the instrument evidenced the value of the duty paid. This was replaced in March 2020 by a new electronic method of stamping (see STSM011015).

Unless a market value rule applies, Stamp Duty is normally charged based on the value of the chargeable consideration. STSM011090 gives details of the current and previous Stamp Duty rates.