Stamp Duty is a familiar term that you may hear when purchasing your home, but Stamp Duty is also a tax paid by the buyer when that buyer purchases shares in a UK company outside of an electronic system such as Crest (when Stamp Duty Reserve Tax would be payable). This is however outside the remit of this blog.

Where shares are transferred which are in certificated form then the instrument of transfer is called a stock transfer form and Stamp Duty is charged at 0.5% on any such transaction valued at over £1,000. When paying Stamp Duty it is rounded up to the nearest £5.

From 25 March 2020, payment of Stamp Duty is no longer evidenced by the impression of stamps on an instrument of transfer i.e., the physical version of the stock transfer form and instead (primarily as a response to Covid-19 and the national lockdowns) documents and payment of Stamp Duty are submitted electronically and HMRC issues confirmation that Stamp Duty has been paid via email.

Stamp Duty on shares is also payable if shares in a foreign company that maintains a share register in the UK are purchased.

The deadline for paying Stamp Duty and getting stock transfer documents to HMRC is no later than 30 days after they have been dated and signed. If Stamp Duty has not been paid by the deadline, a penalty fee and/or interest on the initial payment will follow.

If you or your business require information regarding anything in this blog or generally about your business or any other corporate matter, please call Sarah Ward, head of our corporate team, on 07889 589596 or e-mail Sarah at sward@georgegreen.co.uk for advice and assistance.