STSM053040 | Depositary receipt and clearance services: 1.5 per cent higher rate charge: Stamp Duty Reserve Tax cancelled where Stamp Duty paid on a transaction

Due to the provisions of section 93(7) and 96(5) FA1986, any Stamp Duty paid on an instrument effecting the transfer of securities to a depositary receipt issuer or clearance service is offset against any Stamp Duty Reserve Tax (SDRT) charged under sections 93 or 96 FA1986 respectively on the transfer. In practice therefore if an instrument has been executed and 1.5% Stamp Duty has been paid this may cancel the whole SDRT charge.

Similarly, by virtue of section 99(5) FA1986, there is, generally, no 1.5% SDRT charge on securities the transfer of which will be exempt from all stamp duties, but a charge is imposed upon securities of United Kingdom companies that are listed on an overseas branch register by virtue of section 99(10) FA1986. See STSM055020 for more information.