STSM021200 | Scope of stamp duty on shares: stamp duty: basics of a charge: bulk purchases by PEP & Investment Portfolio Managers

Managers of some Personal Equity Plans and Investment Portfolios often purchase shares in bulk on behalf of a number of their clients. These bulk purchases are registered in the name of the managers or a nominee. The share transfers used to complete these bulk purchases are liable to Stamp Duty (SD) on the consideration paid.

Some managers, however, then charge the individual plan holders or clients SD on the consideration which each pays for their portion of these shares. When each of these individual clients is separately charged to 0.5 per cent duty rounded up to the nearest £5 this results in SD being paid by the individuals which is more than that stamped or charged on the transfer to the managers or the manager’s nominee.

If the documents or other information shows that there has been joint registration in the name of the manager and plan holder or multiple registrations in the names of each client SD is calculated by reference to each underlying transaction, rounding in each case. The alternative method of calculation permitted for block transfers (see STSM021190) is not appropriate in these circumstances.

Under the provisions of SDMA1891/S2, any excess SD collected by managers should be sent to Stamp Taxes immediately.