STSM055110 - Depositary receipt and clearance services: scope of 1.5 per cent charge: Stamp Duty Reserve Tax - bearer securities
While sterling denominated bearer securities issued by a United Kingdom company are generally exempt from Stamp Duty Reserve Tax (SDRT), a 1.5 per cent SDRT charge can arise when a renounceable letter of allotment or acceptance (where the rights under the letter are renounceable not later than six months after its issue) to subscribe for bearer shares, is delivered to a depositary receipt or clearance service system (FA86/S95(2)(a) and FA86/S97(3)(a)).
A shareholder, to whom further shares have been allotted under the terms of a company offer for sale, may decide to deposit the allotment letter (whether nil, partly or fully paid) with a depositary receipt or clearance service system. In this situation, a 1.5 per cent SDRT charge arises, calculated by reference to the market value of the letter at the time of the deposit ( FA86/S93(4)(c) and FA86/S96(2)(c) ).
Alternatively, a shareholder may agree to transfer on sale the rights under an allotment letter or renounceable letter of allotment for consideration in money or money바카라 사이트™s worth amount to another person who immediately lodges it with a depositary receipt issuer or clearance service. A 1.5 per cent SDRT charge arises, calculated by reference to the consideration paid in money or money바카라 사이트™s worth for the purchase of the rights (FA86/S93(4)(b) and FA86/S96(2)(b)).
Where underlying bearer shares are later issued to a depositary receipt issuer or clearance service which holds the letter of acceptance or allotment, no further SDRT charges arise.
See STSM057030 for further guidance on the issue or transfer of a non-sterling denominated bearer instrument by a United Kingdom company (which does not raise new capital, or is not issued in exchange for such an instrument) to a depositary receipt issuer or clearance service.
See STSM055030 for the meaning of an allotment letter and a renounceable letter of allotment.