UK Stamp Duty Reserve Tax (SDRT) - Overview

03.05.2023

Stamp Duty

A duty on physical transfers of ownership, payable ad valorem on receipt of non–CREST-eligible UK equities if the counter value of the transfer is more than GBP 1,000.00.

Stamp Duty Reserve Tax (SDRT)

A duty on electronic transfers of ownership payable on CREST-eligible UK equities.

Both ad valorem Stamp Duty and SDRT can be applied to respective transfers under a 0.5% or a 1.5% regime, as appropriate.

Stamp Duty on physical certificates

Stamp Duty, a duty payable on paper transfer of ownership, is charged at the rate of 0.5% or 1.5% ad valorem on receipt of non–CREST-eligible UK equities in physical form (also called “residuals”) if the countervalue of the transfer is more than GBP 1,000.00.

Ad valorem Stamp Duty applies to receipts free of or against payment where no exemption is claimed. The amount of ad valorem Stamp Duty due is rounded up to the next multiple of GBP 5.00.

The 0.5% Stamp Duty regime
The 1.5% Stamp Duty regime

Stamp Duty refund

Customers that omit to claim an exemption from ad valorem Stamp Duty in their settlement instructions, such that Stamp Duty is overpaid, can submit to Clearstream Banking a duly completed Request for Adjustment of Stamp Duty Reserve Tax and Stamp Duty to claim a refund.

When a refund is processed, a request is made to the relevant registrar for the Stock Transfer Form, which can take up to a month to be delivered and the registrar may charge for the service. Clearstream Banking will pass on any such charge to the customer claiming the refund.

HMRC will only refund Stamp Duty on claims that are less than two years old. To ensure prompt handling, customers are requested to submit the refund request and supporting evidence as soon as possible after the transaction was processed and the over payment was noticed and, at the latest, two months before the two-year deadline.

With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country. It is the customer’s responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due.

The estimated time for receiving a refund is two months from the date of acceptance by HMRC.

Stampable consideration amount

Clearstream Banking will not bear any responsibility with regard to the stampable consideration amount mentioned in the customer's instruction.

If HMRC questions or makes inquiries in relation to the stampable consideration amount mentioned in the instruction or any other details of any of the customer's transactions, it is the responsibility of the customer to provide Clearstream Banking with all required explanations and/or documentation.

By sending to Clearstream Banking an external receipt or delivery instruction for securities subject to stamp duty, the customer is deemed to indemnify Clearstream Banking for any taxes, penalties, interest thereon and other costs that Clearstream Banking may incur as a result of Clearstream Banking's reliance on the information included in the customer's instruction, including the stampable consideration amount indicated by the customer.

Accountable person

The accountable person is identified by proceeding through the following list until one of the categories is relevant and applies in the particular situation concerned:
1.   B, if B is a member of an exchange; or
2.   B's agent, if B's agent is a member of an exchange and B is not such a member; or
3.   A, if A is a member of an exchange; or
4.   A's agent, if A's agent is a member of an exchange and A is not such a member; or
5.   B, if B is a “qualified dealer”; or
6.   B's agent, if B's agent is “qualified dealer” and B is not such a dealer; or
7.   A, if A is a “qualified dealer”; or
8.   A's agent, if A's agent is a “qualified dealer” and A is not such a dealer; or
9.   B is the accountable person.

Stamp Duty Reserve Tax (SDRT) – Overview continued…

Clearstream Banking, as clearance service provider (CSP), has adopted an alternative system of charge in accordance with section 97A Finance Act 1986. Consequently, with respect to each account with Clearstream Banking, customers can choose between 0.5% and 1.5% SDRT regimes for the clearance and settlement of chargeable securities.

	0.5% regime	1.5% regime
Preliminary requirements:	Yes	Yes
Transactions subject to SDRT:	Transfer of chargeable securities for consideration in money or money's worth, for example, a purchase.	Transfer of chargeable securities to a clearance system by way of transfer or issue.
Transfers:	External transfers are authorised and, in principle, external receipts are subject to 0.5%.	External transfers are authorised and, in principle, external receipts are subject to 1.5%.
	Internal transfers are not authorised.	Internal transfers are authorised; no charge to SDRT.
Exemptions / Refunds:	Exemptions / Refunds, as follows: No change of beneficial ownership EU registered charity ^a Market sale exemption ^b True agency exemption ^c Issuing house exemption on new issue	Exemptions / Refunds, as follows: Transfer between two Clearance Service Providers (CSP) ^d Transfer between two Depository Receipt Systems (DRS) ^e Transfer between a CSP and a DRS Issuing house exemption on new issue

a.   Exemption is claimed by the customer as an EU registered charity.
b.   Exemption is claimed by the customer as the SDRT will be accounted for in the future transaction.
c.   Exemption is claimed by the customer as the SDRT has already been accounted for in the previous transaction.
d.   Clearance service providers operate a system for holding securities and settling transactions on them by book entry.
e.   Depository receipts system: is a system for holding securities for an entity whose business includes issuing a depository receipt for a deposit of shares.

To operate the two SDRT regimes, Clearstream Banking maintains two separate accounts in CREST. Customers that want to clear and settle transactions under both regimes must use two separate accounts with Clearstream Banking. Internal transfers from a customer account under one regime to an account of the same or another customer under the other regime are not possible.

Note: The status of the customer's account with Clearstream Banking for SDRT purposes must be verified before transferring UK chargeable securities to Clearstream Banking.

Customers are advised to consult their tax advisors to determine whether to opt for the 0.5% or 1.5% SDRT regime.

Transactions in CREST-eligible chargeable securities are, in principle subject to SDRT at the rate of 0.5% or 1.5% unless an exemption applies.

CREST

The CREST system is a settlement system operated by Euroclear UK & Ireland. The CREST system settles exchange-traded and Over-The-Counter (OTC) securities transactions, with services for:

UK, Irish, Jersey, Guernsey and Isle of Man equities, warrants and covered warrants
UK government bonds and money market instruments
Investment funds, including ETFs

Brokers, international banks, custodians and investment houses connect directly to the CREST system. These institutions provide access for other retail investors (including private individuals) and companies that wish to hold and settle securities electronically, but do not wish to maintain a direct connection.

In relation to SDRT, in accordance with the procedures agreed with HM Revenue & Customs (HMRC), CREST calculates, collects and accounts for SDRT on the basis of the inputs made by its participants.

Clearstream Banking has a semi-direct link to CREST through its depository (Citibank) enabling Clearstream Banking to provide settlement and custody services for CREST-eligible UK securities.

CREST Transaction ID

The CREST Transaction ID consists of 10 (for partials: 12, 14 or 16) alphanumeric characters. The first two or three characters are letters, the remainder are numbers (always making 10 (or 12, 14 or 16) characters in all).

Examples:

QNA0012385

Partials might be as follows:

QNA001238501 and QNA001238502
QNA001238501 and QNA00123850201 and QNA00123850202
QNA001238501 and QNA00123850201 and QNA0012385020201 and QNA0012385020202

0.5% regime:

For an account to be subject to the 0.5% SDRT regime and in order to be entitled to an exemption, customers must complete the Request for Application of the 0.5% Regime with respect to that account and return the form to Clearstream Banking.

1.5% regime:

There is no preliminary requirement to accept chargeable securities under the 1.5% SDRT regime.

However, in order to be entitled to an exemption, customers must duly complete a Request for Application of the 1.5% Regime. By completing this certificate, the customer certifies that, on all transfers for which the customer inputs the exemption flag, the party from whom the securities are received is acting in the capacity of a CSP or a DRS and the receipt is exempt from SDRT.

Note: Particular attention should be given to the input of the Transaction Stamp Status (or exemption flag), as penalties may be incurred if the information subsequently proves to have been incorrect. For more information about the applicable exemption flags, please refer to the Market Link Guide - UK equities, corporate bonds and investment trusts.

Clearstream Banking or HMRC may request further details and/or documents.

Exemption claims

By claiming an exemption, the customer is deemed to indemnify Clearstream Banking for any taxes, penalties, interest thereon and other costs that Clearstream Banking may incur as a result of Clearstream Banking's reliance on the customer's instruction.

Documentary evidence of details of all transactions and, where applicable, proof of exemption from SDRT must be retained for six years from the settlement date of each transaction and must be forwarded upon request from Clearstream Banking or HMRC.

By holding UK securities in an account with Clearstream Banking, customers will be deemed to have authorised the disclosure to HMRC upon request of all details of transactions relating to UK securities.

Payment of SDRT - Overview

There are three main types of SDRT payment:

Stocks and shares CREST payments;
Stocks and shares payments made outside CREST ("off-market payments");
Unit trust and open-ended investment company (OEIC) payments made outside CREST.

Clearstream holds a large proportion of UK shares via CREST. CREST automatically deducts SDRT from chargeable trades and pays over the tax to HMRC. In the case of securities subject to SDRT via Clearstream and when applicable, SDRT will be debited (at a rate of 0.5% or 1.5%, as appropriate) at the latest either two business days after settlement has taken place (on SD+2) or at any time within 10 days of the trade date once the trade is matched, whichever is earlier. The official payment and notice are 14 calendar days after the trade date.

In the case of off-market payments, generally arranged directly by the accountable broker, payment and notice should reach HMRC by the seventh calendar day of the month following the month in which the date of the agreement takes place.

In case of unit trust and OEIC payments outside CREST, applicable SDRT, payment and notice should reach HMRC by the 14th calendar day of the following month. If applicable, SDRT is generally passed on to HMRC by the investment fund managers directly.

The absence of a stampable consideration amount or an incorrect value in general may lead to underpayments or overpayments, that is, an incorrect stampable consideration charge.

SDRT underpayments

When applicable, SDRT (at a rate of 0.5% or 1.5%, as appropriate) will be debited at the latest either two business days after settlement has taken place (on SD+2) or at any time within 10 days of the trade date once the trade is matched, whichever is earlier.

For external receipt instructions (where the customer is to receive securities from an external counterparty) under the 0.5% SDRT regime:

If the an external counterparty is considered a custodian bank and none of the parties has accounted for SDRT in CREST, no default calculation will take place, resulting in an underpayment; or
If the external counterparty is considered a broker and the customer does not account for the stamp duty to be paid in the instruction to CBL, SDRT will be calculated by CREST accordingly.

In the absence of a price from CREST’s price provider, FTI, no stampable consideration will be applied to the transaction.

For delivery instructions under the 0.5% SDRT regime for which the customer delivering the securities accounts for the SDRT, the SDRT will be applied by CREST based on the stampable consideration amount input by the customer.

The absence of a stampable consideration amount or an incorrect value in general may lead to underpayments, that is,. incorrect stampable consideration charge.

If the customer finds that it is liable to pay SDRT, then the customer will have to instruct CBL to make a manual payment to HMRC or alternatively make a direct payment. If the customer is audited and HMRC finds that SDRT is due, then CBL’s depository and, in turn, Clearstream will pass on any obligations to the customer.

Note: If the customer is liable to pay SDRT and does not comply with the delays set forth by HMRC (if sent via CBL, by no later than the 5th calendar day following the month of the payment - the market deadline is no later than the 7th calendar day following the month of the payment), then the customer could be charged an underpayment fee of GBP 100 and additional non-refundable interest, penalties and surcharges. We strongly recommend that customers always ensure that their instructions include the appropriate stampable consideration amount along with the respective codes to avoid the incorrect calculation of SDRT resulting in over- or underpayments to HMRC. For further information about the applicable penalites, visit the HMRC website: www.hmrc.gov.uk

To make a payment of SDRT under the 1.5% regime due to underpayment through CBL, customers must submit:

Request for Adjustment of Stamp Duty Reserve Tax and Stamp Duty; and
(In the case of an incorrect stampable consideration amount) a copy of the contract note as additional documentation and/or supporting evidence.

If the account in CREST from which the securities are delivered to CBL is not defined as a clearance service account or depository receipt account (account tax status "C" in CREST), an additional confirmation from the counterparty delivering the securities is required. This confirmation must be on the counterparty's headed paper, stating that there was a clear transfer from a CSP or a DRS.

Alternatively, if the customer wants to make a direct cash payment, the following payment details are required:

Sort Code: 08-32-10
Account number: 12237210
Account Name: HMRC Stamp Office Shares Unit

Cheques must be made payable to “Her Majesty's Revenue and Customs” and must be sent to:

HMRC
Birmingham Stamp Office
9th floor
City Centre House
30 Union Street
Birmingham
B2 4AR
United Kingdom

Payment reference: CREST payment
Payment details: CREST reference
Additionally, for manual payments, credit advices should be sent to HMRC by email to:
nirmala.chauhan@hmrc.gsi.gov.uk
Subject: Credit Advice

This email must include all the specific trade details (such as the ISIN, nominal amount, trade date, settlement date and CREST reference). This ensures that HMRC can identify the payment and issue an appropriate payment receipt.

SDRT - Overpayments and reclaims

Most of the claims for refund of SDRT relate to circumstances in which customers were eligible for an exemption from SDRT but failed to include the appropriate Transaction Stamp Status in their settlement instructions. To reduce the number of claims for refund, customers are strongly urged to pay specific attention to the formatting of their instructions for SDRT purposes.

0.5% SDRT regime - Overview

The features of the 0.5% SDRT regime are as follows:

Only external receipts and deliveries can be settled in an account subject to 0.5% SDRT. In general, Clearstream Banking will collect SDRT from the purchaser on all external transfers at the standard rate of 0.5% on the stampable consideration amount unless an exemption applies or the counterparty is accounting for the SDRT.
When the delivering customer is - or is acting on behalf of - the accountable person with respect to the transaction, the SDRT will also be levied on external deliveries of securities. In such cases, the counterparty in CREST to whom the securities are delivered is not charged with the SDRT.
Internal (Clearstream Banking - Clearstream Banking) receipts and deliveries are not authorised.
A customer operating an account subject to the 0.5% rate of SDRT may not:

Authorise transfers between accounts in its own books (that is, may not operate a clearance service); or
Operate a depository receipt scheme with respect to securities held under the 0.5% SDRT regime.

For an account to be subject to the 0.5% SDRT regime, customers must fulfil the respective preliminary requirements.

0.5% SDRT regime - Transactions subject to SDRT

0.5% SDRT is applicable to transfers of chargeable securities for consideration in money or money's worth (for example, a purchase).

The amount of SDRT charged is calculated 0.5% of the stampable consideration amount (that is, the amount or value of the consideration).

Applicable 0.5% SDRT is debited either on the actual settlement date or on trade date +10 business days (if the instruction is matched in CREST), whichever is the earlier.

0.5% SDRT regime - Exemptions

Most exemptions are available automatically through CREST and can be claimed by inserting the appropriate Transaction Stamp Status flag or exemption flag in the instruction. The main exemptions available through Clearstream Banking system are as follows:

No change of beneficial ownership (NCBO):

Exemption is claimed by the customer on a transfer with no change of beneficial ownership (available only on transfers free of payment).

EU registered charity:

Exemption is claimed by the customer as an EU registered charity.

Market sale:

Exemption is claimed by the customer as the SDRT will be accounted for in the future transaction (available only on transfers against payment; one trade is processed in two legs and SDRT is to be accounted for in only one of them by the accountable person).

True agency exemption:

Exemption is claimed by the customer as the SDRT has already been accounted for in the previous transaction (available only on transfers against payment; one trade is processed in two legs and SDRT is to be accounted for in only one of them by the accountable person).

Issuing house exemption on new issue:

Exemption is claimed by the customer as the receipt of the securities is a result of a new issue.

0.5% SDRT regime - Refunds

Refunds are available through the Clearstream Banking system in the following circumstances:

No change of beneficial ownership (NCBO):

The customer was entitled to claim an exemption from SDRT in a settlement instruction processed through CREST, as there had been no change of beneficial ownership during the movement of the securities (for example, a transfer between two nominees of the same beneficial owner). However, the customer failed to include the appropriate Transaction Stamp Status in the instruction with the result that 0.5% SDRT was charged.

EU registered charity:

The customer was entitled to claim an exemption from SDRT in a settlement instruction processed through CREST, as the receiver of the securities was an EU registered charity. However, the customer failed to include the appropriate Transaction Stamp Status in the instruction with the result that 0.5% SDRT was charged.

Note: Any EU charity that wants to benefit from exemption from SDRT must first seek approval from HMRC Charities and obtain the relevant register number from the HMRC.

HMRC will issue a charity register number if the organisation is deemed to be suitably qualified. Incorrect claims for relief may give rise to penalty charges.

Market sale:

The customer was entitled to claim an exemption from SDRT in a settlement instruction processed through CREST as the customer was acting as an agent for his customer to enable the securities to be moved to a broker who is accountable for the SDRT. The securities were first received in the customer's account with Clearstream Banking (first leg of the transaction) and then delivered to the broker (second leg of the transaction). However, the customer failed to include the appropriate Transaction Stamp Status in the instruction when initially receiving the securities in Clearstream Banking with the result that 0.5% SDRT was charged.

Note: In order for the transaction to be eligible for the market sale exemption, the same trade and settlement dates must be used in both legs of the transaction. Furthermore, the day on which the second leg of the transaction is settled must be equal to or later than the day on which the first leg is settled.

True agency exemption:

The customer was entitled to claim an exemption from SDRT in a settlement instruction processed through CREST, as the SDRT had already been paid on a previous leg of the transaction (for example, the customer's counterparty was acting as an agent and purchased the securities through a broker who accounted for the 0.5% SDRT on the first leg of the transaction). However, the customer failed to include the appropriate Transaction Stamp Status in this instruction to receive the securities in Clearstream Banking with the result that 0.5% SDRT was charged again.

Issuing house exemption on new issue:

The customer was entitled to claim an exemption from SDRT in a settlement instruction processed through CREST, as the receipt of the securities was a result of an issue of new securities. However, the customer failed to include the appropriate Transaction Stamp Status in this instruction with the result that 0.5% SDRT was charged.

Incorrect stampable consideration amount:

The customer input an incorrect stampable consideration amount in the settlement instruction processed through CREST resulting in an incorrect calculation and overpayment of SDRT. The customer is entitled to claim a refund of the amount of SDRT overpaid.

SDRT charged twice:

In addition to the true agency exemption and market sale, the 0.5% SDRT that was charged twice can be claimed through Clearstream Banking in the following cases:

The counterparty delivering the securities (usually a broker/dealer) failed to account for the 0.5% SDRT in a settlement instruction processed through CREST and the receiving Clearstream Banking customer was charged according to the CREST default rules. However, the counterparty later paid the SDRT to HMRC with the result that the 0.5% SDRT was paid twice.
The counterparty delivering the securities (usually a broker/dealer) accounted for the 0.5% SDRT even though the specific intention of the transaction was to transfer the securities to a CSP for which a 1.5% charge was due in CREST. The transaction resulted in 0.5% SDRT being overpaid.

To claim a refund of SDRT under the 0.5% regime overpaid through Clearstream Banking, customers must submit the following documentation and supporting evidence to Clearstream Banking:

Request for Adjustment of Stamp Duty Reserve Tax and Stamp Duty
Additional documentation and/or supporting evidence:

No change of beneficial ownership:

The customer confirms that there has been no change in beneficial ownership throughout the movement of the securities. This confirmation is included in the Request for Adjustment of Stamp Duty Reserve Tax and Stamp Duty.

EU registered charity:

The customer must provide documentation, in the original, with, if the language is other than English, an officially translated form, proving that the final beneficial owner is an EU registered charity. To be refundable, the SDRT charge must have been paid after July 2009.

Market sale:

Clearstream Banking reference of the delivery of the securities to the counterparty that is accountable for the SDRT.

True agency exemption:

CREST transaction ID of the first leg of the transaction in which the SDRT was already accounted for; Amount of SDRT paid in the first leg.

Issuing house exemption of a new issue:

Copy of the offering circular.

Incorrect stampable consideration amount:

Copy of the contract note.

SDRT charged twice:

CBL customer to verify with counterparty how the stamp duty has been overpaid and to provide respective proof of payment, for example, a letter issued by HMRC evidencing that SDRT was paid by the delivering party or respective CREST transaction ID of the first leg. In addition, an authorisation from the delivering party must be provided to claim a refund on its behalf.

Further details of refunds are as follows:

When is a refund claim not available?

A refund of SDRT cannot be claimed when the securities were received in error on an account subject to SDRT. Furthermore, no exemption from SDRT can be claimed on the basis of "no change of beneficial ownership".

Also, given the two different SDRT regimes under which UK chargeable securities can be held through Clearstream Banking, the status of the customer's account with Clearstream Banking for SDRT purposes must be verified before transferring UK chargeable securities to Clearstream Banking.

What is the deadline for receipt of documents?

The statutory deadline for claiming a refund of SDRT is a fixed period from the date on which SDRT became due or the date on which the SDRT was actually paid, as follows:

For SDRT payments up to and including 31 March 2011, six years;
For SDRT payments as of 1 April 2011, four years.

For more information, please consult the HMRC website here.

To ensure prompt handling of the claim, customers are requested to submit the required documentation and supporting evidence as soon as possible after the transaction was processed and the overpayment was noticed.

With respect to tax reclaims in general customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country. It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly, and to calculate the amount due.

When are refunds received?

Clearstream Banking will credit the customer's account upon receipt of the refund from HMRC. However, following the assurance procedures of HMRC, refunds are paid on a "without prejudice" basis and additional supporting material may be requested by HMRC after the payment (usually within 60 days of the date of the claim for refund).

It is expected that the required documentation and supporting evidence will be sufficient. However, if HMRC concludes that the refund was unduly paid and reverses the payment, Clearstream Banking will accordingly reverse the refund paid to the customer's account.

1.5% SDRT regime - Overview

The features of the 1.5% SDRT regime are as follows:

On every external receipt of UK securities, Clearstream Banking will apply 1.5% SDRT on the stampable consideration amount unless the delivering party accounts for the SDRT or the receiving customer claims and is entitled to an exemption from SDRT.
No SDRT will be due on internal (Clearstream Banking - Clearstream Banking) receipts and deliveries.

Unless otherwise indicated, a customer's account will by default be subject to the 1.5% SDRT regime.

1.5% SDRT regime - Transactions subject to SDRT

1.5% SDRT is applicable when securities are transferred or issued into a clearance service. The charge is levied as follows:

Where the securities are issued, on their price when issued;

Note: New issues resulting in UK securities, when repatriated to the UK, are not subject to SDRT. However, securities incorporated in jurisdictions other than the UK but whose registrar is in the UK are subject to SDRT.

Where the securities are transferred for consideration, on the amount or value of the consideration; and
In other situations, on the open market value of the securities at the time of the transfer or appropriation.

In principle, the clearance service provider (CSP) is accountable and liable for the SDRT

1.5% SDRT is applicable to transfers of chargeable securities for consideration in money or money's worth (for example, a purchase).

The amount of SDRT charged is calculated 1.5% of the stampable consideration amount, identified as follows:

Where the securities are transferred for consideration in money or money's worth: the amount or value of the consideration;
Where the securities are issued: their price when issued (that is, the unit price multiplied by the quantity of the issue);
In all other cases: the value of the securities.

Applicable 1.5% SDRT is debited either on the actual settlement date or at any time within 10 days of the trade date once the trade is matched (if the instruction is matched in CREST), whichever is earlier.

1.5% SDRT regime - Transfers

External transfers:

External transfers are authorised and, in principle, external receipts are subject to 1.5% SDRT.

Internal transfers:

Internal transfers are authorised and there is no charge to SDRT.

1.5% SDRT regime - Exemptions

Exemptions from 1.5% SDRT may apply as follows:

On transfers between two clearance service providers (CSP);
On transfers between two depository receipt systems (DRS);
On transfers between a CSP and a DRS;
Issuing house exemption on new issue.

In order to be entitled to an exemption, customers must duly complete a one-time Request for Application of the 1.5% SDRT Regime to certify that, on all transfers for which the customer inputs the exemption flag, the party from whom the securities are received is acting in the capacity of a CSP or a DRS and the receipt is exempt from SDRT.

N.B.: Particular attention should be given to the inclusion of the Transaction Stamp Status (or exemption flag) in instructions, as penalties may be incurred if the information subsequently proves to have been incorrect. For more information about the applicable exemption flags, please refer to the Market Link Guide - UK equities, corporate bonds and investment trusts .

1.5% SDRT regime - Refunds

Refunds are available through the Clearstream Banking system in the following circumstances:

Transaction Stamp Status not included in the instruction

The securities were received from a clearance service provider (CSP) or a depository receipt system (DRS) and so the customer was entitled to claim an exemption from 1.5% SDRT but the customer failed to indicate this in the settlement instruction processed through CREST, with the result that 1.5% SDRT was charged.

Incorrect stampable consideration amount

To claim a refund of SDRT under the 1.5% regime under- or overpaid through Clearstream Banking, customers must submit the following documentation and supporting evidence to Clearstream Banking.

Request for Adjustment of Stamp Duty Reserve Tax and Stamp Duty
In the case of an incorrect stampable consideration amount: a copy of the contract note as additional documentation and/or supporting evidence.

In the event that the account in CREST from which the securities are delivered to Clearstream Banking is not defined as a clearance service account or depository receipt account (account tax status "C" in CREST), an additional confirmation from the counterparty delivering the securities is required. This confirmation must be on the counterparty's headed paper stating that there was a clear transfer from a CSP or a DRS.

Refunds resulting from a new issue of shares or from a corporate action

On 1 October 2009, the European Court of Justice ruled that, when the shares entering a European clearance service or depository receipt system are the result of a new issue of shares or are the result of shares being issued as part of a corporate action, then charging SDRT at a rate of 1.5% on such movement of such securities contravenes European Law (European Court of Justice case C-569-7 October 2009).

HM Revenue and Customs (HMRC) have agreed to consider the repayment of SDRT paid at 1.5% on transactions covered by this ECJ ruling and have advised that any repayment of such tax may be delayed until an as yet not identified point in time to allow for any legislative changes that may prove necessary. HMRC has further indicated that the current time limit for lodging a reclaim of SDRT of six years from the date of payment will be applied to reclaims that come under this ECJ ruling.

To claim, in accordance with ECJ ruling case C-569-7, a refund of SDRT under the 1.5% regime overpaid through Clearstream Banking, customers must submit the following documentation and supporting evidence to Clearstream Banking:

Request for Refund of Stamp Duty Reserve Tax (ECJ 2009)

When is a refund claim not available?

What is the deadline for receipt of documents?