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Stamp Duty Reserve Tax

When you buy existing shares through a stockbroker, the transaction is usually completed electronically through CREST - the electronic settlement and registration system. This is known as a paperless transaction.

How Stamp Duty Reserve Tax is worked out

You pay SDRT on paperless transactions for UK shares at a flat rate of 0.5 per cent. But this is based on what you give for the shares (called the ‘consideration’) - not what they're worth.

This means that:

• Use the HM Revenue & Customs (HMRC) Stamp Taxes calculator for stocks and shares Opens new window

Shares, share options, rights and interests

You pay SDRT existing shares in a company incorporated in the UK, or in a foreign company that maintains a share register in the UK, and also when you buy:

• an option to buy shares
• rights arising from shares, like the rights under a rights issue
• an interest in shares, like an interest in the money from selling them

If you subscribe for new shares in a company, Stamp Duty is not payable.

If you buy units in a unit trust, or invest in an 'open ended investment company', the trust or the company pays the SDRT and they take this into account when setting the price at which they'll sell to you.

• Use HMRC Stamp Taxes calculator for stocks and shares Opens new window

Stamp Duty

If you use a stock transfer form when you buy shares, then it's a paper transaction. You pay Stamp Duty on paper transactions, not SDRT. Stamp Duty is payable on the same sorts of transaction and at the same 0.5 per cent rate as SDRT, but the duty is rounded up to the nearest £5 above.

However, if you buy shares for any amount of consideration up to £1,000 no Stamp Duty will be payable. If the consideration is £1,050, the duty will be £10 etc. If you're given shares for nothing, you don't have to pay any Stamp Duty.

• Use HMRC Stamp Taxes calculator for stocks and shares Opens new window

Higher rate of Stamp Duty Reserve Tax or Stamp Duty for special share arrangements

You'll have to pay SDRT or Stamp Duty at a higher rate of 1.5 per cent if you transfer shares into a 'depositary receipt scheme' or a 'clearance service'. These are special arrangements where the shares are held by a third party and can be traded free of Stamp Duty or SDRT. (With some clearance services the higher rate isn't charged and Stamp Duty or SDRT is payable in the normal way when shares are traded.)

How Stamp Duty Reserve Tax and Stamp Duty are paid

Most share transactions are paperless transactions, which are completed electronically through CREST. CREST automatically deducts the SDRT and sends it to HMRC. Your stock broker will settle up with CREST for the cost of the shares and the SDRT and then bill you for these and the broker's fees.

If you don't buy shares through CREST you pay the Stamp Duty to HMRC yourself.

SDRT is already accounted for in the price you pay for units in unit trusts or shares in open-ended investment companies.

Tax on buying foreign shares

You don't have to pay UK Stamp Duty or SDRT if you buy foreign shares. But there may be foreign taxes that you'll have to pay.

Enquiries about Stamp Duty Reserve Tax or Stamp Duty

If you have any questions about Stamp Duty or SDRT, call the HMRC Stamp Taxes Helpline.

• Contact the Stamp Taxes Helpline Opens new window

More useful links

• Stamp Duty on buying property

• Savings and investments

• Getting advice on your savings and investments

• More information on managing money

• Stamp Duty Reserve Tax - the basics Opens new window

• Stamp Duty on shares Opens new window

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