HMRC stamp taxes on shares modernisation – Law Society response
HMRC is proposing to modernise the framework that encompasses stamp duty and stamp duty reserve tax (SDRT). This includes:
- having a mandatory, single tax on securities instead of separate taxes for electronic transfers (SDRT) and paper instruments (stamp duty)
- changing the way stamp duty is processed so it is no longer manually processed by HMRC but self-assessed by the taxpayer, bringing it in line with other taxes
- retaining some reliefs and exemptions under a single tax model and removing those HMRC considers redundant (such as the £1,000 de minimis limit for stamp duty)
- removing legislation deemed not relevant to the modern market or already covered by newer legislation
Overall, we welcome this consultation and the majority of its proposals.
Many aspects of the current rules for paper transfers are archaic and out of step with modern business practices.
Proposals to modernise this system are useful.
What this means for solicitors
The proposals will change the way solicitors advise clients and payers of stamp taxes on the stamp taxes framework, principally when there has been a paper transfer of shares.
The consultation closed on 22 Jun 2023.
We are awaiting the government’s response.