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Stamp taxes on shares

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The Stamp Duty and Stamp Duty Reserve Tax (LCH SA) Regulations, SI 2022/102 remove multiple charges to stamp duty and stamp duty reserve tax (SDRT) for securities that are transferred to the clearing house known as LCH SA, its clearing participants or its nominees, where the purpose of the transfer is the onward clearing of those securities to the ultimate purchaser.

The regulations apply to transactions made on a regulated market such as a stock exchange, a multilateral trading facility or over the counter (direct trading between buyers and sellers), which are transferred through the LCH SA clearing chain. The process of clearing can involve multiple transfers of the shares, each of which would potentially be chargeable to stamp taxes even though those transfers arise in respect of what is essentially a single sale and purchase. The regulations ensure that stamp charges are only paid once, as intended, by the ultimate purchaser.

The regulations have effect in relation to instruments executed on or after 28 February 2022 (stamp duty), and agreements to transfer traded securities or options made on or after that date (SDRT).

Issue: 1563
Categories: News