When is Stamp Duty and PTM Levy charged?
Stamp duty / Stamp Duty Reserve Tax (SDRT) on UK equity purchases: (Stamp Duty is NOT charged on the purchase of Gilts, Unit Trusts or OEICS).
- 0.5% SDRT on all UK equity purchases settled through CREST, rounded to the nearest 1p.
- 0.5% stamp duty on all UK equity purchases not settled through CREST, rounded up the nearest £5.
- Stamp duty on Irish registered stock currently charged at 1%, rounded up to the nearest penny.
You pay Stamp Duty Reserve Tax 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 Stamp Duty Reserve Tax and they take this into account when setting the price at which they'll sell to you.
PTM* levy - £1 on all UK equity deals over £10,000
*Panel of Takeovers and Mergers
NB Please note the Stamp Duty is only applicable on PURCHASES. It is not charged on Sales.
From 28 April 2014, the 0.5% stamp duty or stamp duty reserve tax charge currently applied to purchases of eligible shares traded on recognised growth markets will be abolished.
What does this mean?
You will no longer be charged 0.5% stamp duty of the transaction value each time you buy a share or marketable security on a recognised growth market*.
A recognised growth market means a ‘recognised stock exchange' where the majority of the companies whose shares are traded on the exchange have a market capital less than £170m. Recognised growth markets include the Alternative Investment Market (AIM) and the ICAP Securities & Derivatives Exchange (ISDX). Other markets may also be included on the list of recognised growth markets, which will be available on HMRC's website.
You can purchase AIM and ISDXs shares through any Barclays Stockbrokers investment account. When considering AIM-listed stocks you should be aware that such companies tend to be smaller and as such the related risks and price volatility can be greater. Their value can go down as well as up and you may receive back less than you invest.
What are the benefits?
•From 28 April 2014, you will not have to pay stamp taxes when you purchase shares on the AIM or ISDX
•The removal of the stamp duty and stamp duty reserve tax charge, along with our new, lower online share dealing commissions, can help you get a better deal when investing in growth market shares•This may allow you to expand your portfolio to include equity growth markets.
*These must not be listed on another recognised stock exchange and the trading company must have applied to and been accepted by HMRC for recognised growth market status for Alternative Investment Market (AIM) and High Growth Segment on the basis of the Finance Bill 2014.
Barclays Stockbrokers offers guidance to help you but does not give investment, legal or tax advice. If you have any queries as to the legal or tax implications of any investment or an investment's suitability for you, you should seek independent professional advice.