Stamp Duty on shares is a 0.5% tax on the purchase of shares in UK companies using a paper stock transfer form. It is small in percentage terms but large in friction if forgotten, because Companies House and a buyer’s solicitor will refuse to process the transfer until the document is stamped by HMRC.
Stamp Duty vs SDRT
There are two parallel taxes on share transactions, with the same headline rate but different mechanics.
| Tax | Trigger | Rate | Pays |
|---|---|---|---|
| Stamp Duty | Paper share transfer (stock transfer form) | 0.5% | Buyer |
| Stamp Duty Reserve Tax (SDRT) | Electronic transfer (CREST) | 0.5% | Buyer |
| Stamp Duty | Transfer of partnership interest | 0.5% | Buyer |
| Higher SDRT | Depositary receipt or clearance service entry | 1.5% | Issuer |
Most listed share trades happen electronically and SDRT is collected automatically. Private company share transfers almost always go through paper stock transfer forms and Stamp Duty.
The £1,000 threshold
A stock transfer form is exempt from Stamp Duty if the chargeable consideration is £1,000 or less and the form is properly certificated. The buyer ticks Certificate 1 on the back of the form, signs it, and the transfer can go straight to the company.
| Consideration | Stamp Duty | Action |
|---|---|---|
| £0 (gift, no consideration) | None | Certificate 2 |
| £1 to £1,000 | None | Certificate 1 |
| £1,001 to £x | 0.5% rounded up to nearest £5 | Send to HMRC |
| Listed shares via CREST | SDRT 0.5% | Automatic |
Filing the stamp duty notification
Since 2020 the process is fully digital. You email the stock transfer form (or instrument of transfer) to HMRC’s stamp duty inbox along with payment by Faster Payments, BACS or CHAPS. HMRC sends back a confirmation letter that takes the place of an embossed stamp. You then send that letter and the form to the company secretary so the share register can be updated.
- Calculate duty: 0.5% of consideration, rounded up to nearest £5
- Pay HMRC by reference (your name + transfer date)
- Email the signed form to stampdutymailbox@hmrc.gov.uk
- Wait 15 working days for HMRC confirmation
- Send confirmation and form to the company for register update
- File SH01 if shares are newly allotted (different process, no Stamp Duty)
Common exemptions
Several reliefs remove the duty entirely. Group relief covers transfers between 75% group companies; takeover relief applies to share-for-share exchanges meeting section 77 conditions; loan capital is generally exempt unless it has equity features.
Final pointers
Stamp Duty is easy to miss in fast-moving deals; build it into your closing checklist. See our guides on directors’ loan account, dividend tax for directors, and Companies House annual accounts. The HMRC Stamp Duty manual is the authoritative reference. See pricing for bookkeeping that keeps the supporting documents with every posting.