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STSM022220 | Scope of stamp duty on shares: stamp duty: adjudication, stamps and reliefs: sales to options intermediaries

From HM Revenue & Customs · Stamp Taxes on Shares Manual

Section 80A FA1986 provides relief from Stamp Duty, subject to certain conditions, for the transfer of stock to a recognised ‘options intermediary’.

Options intermediaries may be recognised by the trading platform (a regulated market, multilateral trading facility (MTF), recognised foreign exchange (RFE), or recognised foreign options exchange (RFOE)) which they are a member of, or directly approved by HMRC.

Detailed guidance on intermediary relief can be found starting at STSM042050.

See STSM022230 for the meaning of regulated market, MTF, RFE, and RFOE.

Options Intermediary

An options intermediary is a person who carries on a bona fide business of dealing in quoted or listed options and does not carry on an excluded business (see STSM042060).

Quoted or listed options means options which are quoted on or listed by a regulated market, an MTF, or a RFOE.

The Conditions

Members of regulated markets (section 80A(2) FA1986)

  • the person is an options intermediary and recognised as such by the market

  • options of that type are regularly traded on that market

  • relief is available wherever the trade is executed

Members of MTFs , RFEs or RFOEs (section 80A(2A) FA1986)

  • the person is an options intermediary and recognised as such by the facility or exchange

  • options of that type are regularly traded on that facility/exchange

  • the sale is effected on the facility/exchange (per section 80A(6) FA1986, this means it is subject to the rules of the facilty or exchange, and is reported according to the rules of that facility or exchange)

Non - members of regulated markets (section 80A(2B) FA1986)

  • the person is an options intermediary who has been approved for section 80A purposes by HMRC

  • options to buy or sell stock of that kind are regularly traded on a regulated market, MTF, RFE or RFOE

  • stock of that kind is regularly traded on a regulated market

Non - members of MTFs, RFEs and RFOEs (section 80A (2C) FA1986)

  • the person is an options intermediary who has been approved for section 80A purposes by HMRC

  • options to buy or sell stock of that kind are regularly traded on an regulated market, MTF or RFE

  • the sale is effected on a relevant qualifying exchange