Do I Pay Stamp Duty When Buying Shares?

When you buy shares using a paper stock transfer form, you'll need to pay Stamp Duty to HMRC and submit the completed form within 30 days. This tax applies to physical share transactions and is separate from Stamp Duty Reserve Tax (which covers electronic share purchases) and Stamp Duty Land Tax...

What is Stamp Duty on shares?

Stamp Duty is a tax you pay when you buy shares using a stock transfer form — a paper document that records the transfer of share ownership from one person or company to another. It's important not to confuse this with Stamp Duty Reserve Tax, which applies when you buy shares electronically (for example, through a stockbroker's platform), or Stamp Duty Land Tax, which you pay when buying property.

When do you need to pay Stamp Duty?

You must pay Stamp Duty and submit your stock transfer documents to HMRC within 30 days of the form being signed and dated. This deadline applies regardless of whether the form was completed at the start or end of the month.

If the 30-day deadline falls on a weekend or bank holiday, your payment must reach HMRC by the end of the previous working day. Missing this deadline may result in penalties, interest charges, or both.

When you don't need to pay Stamp Duty

You won't need to pay Stamp Duty in certain situations:

If the consideration is £1,000 or less: Complete certificate 1 on the back of the stock transfer form, provided the transfer doesn't form part of a larger transaction or series of transactions totalling more than £1,000.

If the transfer is exempt: Complete certificate 2 if the transfer qualifies for an exemption, such as transfers connected to divorce or the dissolution of a civil partnership.

If no consideration is given: When shares are transferred as a gift with no payment involved, you don't need to complete either certificate, but you should state "Nil" as the consideration on the form.

If you've completed certificate 1 or 2, or no consideration was given, you won't usually need to pay Stamp Duty or send the form to HMRC for stamping.

How to complete a stock transfer form

HMRC doesn't issue stock transfer forms. You can obtain one from a broker, company registrar, lawyer, or accountant who deals with share transfers, or download one from the internet.

When completing the form, you must provide:

The shares being transferred (quantity, class and type — for example, "100 ordinary shares, ABC Limited")
The buyer's name and address
The seller's name and address (the registered holder)
The value in pounds sterling of what you paid for the shares

What counts as consideration

The consideration (what you're paying for the shares) can include:

Cash payments (including bank transfers or cheques)
Other stocks and shares
Debt assumed or released

If you're paying in a foreign currency, you must convert the amount to pounds sterling using the exchange rate either on the date of transfer or as agreed between buyer and seller. State which exchange rate you've used on the form.

If you're giving consideration other than cash, you must state what you've given and provide a cash value. For example, "100 ordinary shares in XYZ Limited with a value of £70,000" or "debt assumed of £70,000".

Where the consideration is calculated using a formula in another document (such as a Share Purchase Agreement), state this on the form and include a copy of the agreement with your submission.

How to pay Stamp Duty

You must pay by bank transfer using one of the following methods:

CHAPS or Faster Payments: You can submit your payment on the same or next day.

Bacs: Allow 3 working days for the payment to reach HMRC.

Check your bank's processing times and maximum transaction limits before paying.

Payment details for UK bank accounts

Sort code: 08 32 10
Account number: 12001098
Account name: HMRC Birmingham Stamp Office

Payment details for overseas bank accounts

Account number (IBAN): GB02 BARC 2011 4773 6185 95
Business Identifier Code (BIC): BARCGB22
Account name: HMRC Birmingham Stamp Office

All payments must be made in pound sterling. Your bank may charge you if you attempt to pay in another currency.

Do not post a cheque to HMRC. If you cannot pay electronically, contact HMRC's Stamp Duty enquiries team.

Payment reference

You must provide a payment reference so HMRC can identify your payment. Create this using your name and the payment amount (for example, "JBrown240.00").

If you're a solicitor or adviser paying on behalf of a client, you can use your client's reference or matter number instead. Using an incorrect reference will delay the payment being allocated correctly.

How to submit your stock transfer form

Since 25 March 2020, the physical stamping system has been permanently withdrawn. You no longer need to send your original documents to HMRC, and the form is considered duly stamped once you've paid and submitted your notification.

Submitting by email

Email a scanned PDF of your completed, signed and dated stock transfer form to: stampdutymailbox@hmrc.gov.uk

HMRC accepts e-signatures.

Your email must include:

The payment reference
The payment amount
The date of payment
An electronic copy of your signed and dated stock transfer form or instrument of transfer

If your stock transfer form doesn't include full details, also provide:

The name of the company whose shares are being transferred
Details of the shares being transferred, including the transfer date
The parties to the transaction
The amount of consideration

You must also include electronic copies of any Share Purchase Agreement and supporting documents if your Stamp Duty calculation refers to them.

If you're submitting multiple stock transfer forms with a single Stamp Duty payment, provide a schedule showing how the Stamp Duty is allocated across the instruments.

Submitting by post

If you cannot submit electronically, post your notification (not original documents) to:

BT — Stamp Duty

HM Revenue and Customs

BX9 2AS

United Kingdom

You must include your contact details when submitting by post. HMRC will not retain or return original documents sent to this address.

What happens next

HMRC cannot acknowledge each individual notification. They aim to process 80% of stock transfer forms within 15 working days of receiving them. You should allow 20 working days for your form to be dealt with.

HMRC will contact you if they need more information or if a document is missing or incorrect. Once processed, they'll send you a confirmation letter.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.