Finance Act 1986

93 Depositary receipts [F1 : 1.5% charge] U.K.

(1) F2 ... There shall be a charge to stamp duty reserve tax under this section where in pursuance of an arrangement —

(a) a person falling within subsection (2) below has issued or is to issue a depositary receipt for chargeable securities, and

(b) chargeable securities of the same kind and amount are transferred F3 ... to [F4 the person mentioned in paragraph (a) above or] a person falling within subsection (3) below, or are appropriated by [F5 the person mentioned in paragraph (a) above or a person falling within subsection (3) below] towards the eventual satisfaction of the entitlement of the receipt's holder to receive chargeable securities.

[F6 (1A) The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—

(a) subsection (7) of this section (exception so far as stamp duty is chargeable);

(b) section 95 (general exceptions);

(c) section 95A (replacement securities);

(d) section 97AB (exempt capital-raising transfers);

(e) section 97AC (exempt listing transfers);

(f) section 97AD (exception for transfers of shares held by issuing company);

(g) section 97B (transfers between depositary receipt system and clearance system).]

(2) A person falls within this subsection if his business is or includes issuing depositary receipts for chargeable securities.

(3) A person falls within this subsection if his business is or includes holding chargeable securities as nominee or agent for the person who has issued or is to issue the depositary receipt.

(4) Subject to subsections [F7 (6) and] (7) below, tax under this section shall be charged at the rate of [F8 1.5 per cent.] of the following—

F9 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) in a case where the securities are transferred for consideration in money or money's [F10 worth—

(i) the amount or value of the consideration, or

(ii) where subsection (4A) applies, the amount or value of the consideration or, if higher, the value of the securities;]

(c) in any other case, the value of the securities.

[F11 (4A) This subsection applies where the transfer of the securities is pursuant to—

(a) the exercise of an option to buy or to sell the securities, and

(b) either—

(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (2) or (3), or

(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.]

F12 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) In a case where—

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(c) subsection (4)(c) above applies in the case of the transfer to the other person,

(d) before the making of the transfer to the other person an instrument is received by a person falling within [F13 subsection (2) or (3)] above,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (4)(c) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(7) Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities, and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then —

(a) if the amount of the duty is less than the amount of tax found by virtue of [F14 subsections (4) and] (6) above, the tax charged under this section shall be the amount so found less the amount of the duty;

(b) in any other case, there shall be no charge to tax under this section in respect of the transfer.

(8) Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (9) below) be the person who has issued or is to issue the depositary receipt.

(9) Where tax is charged under the preceding provisions of this section in a case where securities are transferred, and at the time of the transfer the person who has issued or is to issue the depositary receipt is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.

F15 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) Subject to subsection (12) below, this section applies where securities are transferred, issued or appropriated after 18th March 1986 (whenever the arrangement was made).

(12) This section does not apply, in the case of securities which are transferred, if the Board are satisfied that they were acquired or appropriated by the transferor on or before 18th March 1986 for or towards the eventual satisfaction of the entitlement of a person to receive securities of the same kind under a depositary receipt (whether issued on or before that date or to be issued after that date).

Textual Amendments

F1 Words in s. 93 heading inserted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by Finance Act 2024 (c. 3), Sch. 11 para. 7(2)(a) (with Sch. 11 para. 26)

F2 Words in s. 93(1) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 7(2)(b)(i) (with Sch. 11 para. 26)

F3 Words in s. 93(1)(b) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 7(2)(b)(ii) (with Sch. 11 para. 26)

F4 Words in s. 93(1)(b) inserted (with effect as mentioned in s. 193(4) of the amending Act) by Finance Act 1996 (c. 8), s. 193(2)(a)

F5 Words in s. 93(1)(b) substituted (with effect as mentioned in s. 193(4) of the amending Act) by Finance Act 1996 (c. 8), s. 193(2)(b)

F6 S. 93(1A) inserted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by Finance Act 2024 (c. 3), Sch. 11 para. 7(2)(c) (with Sch. 11 para. 26)

F7 Words in s. 93(4) substituted (with application as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), s. 104(2)(a)

F8 Words in s. 93(4) substituted (with effect as mentioned in s. 194(7) of the amending Act) by Finance Act 1996 (c. 8), s. 194(2)(a)

F9 S. 93(4)(a) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 7(2)(d) (with Sch. 11 para. 26)

F10 Words in s. 93(4)(b) substituted (with effect in accordance with s. 139(5) of the amending Act) by Finance Act 2016 (c. 24), s. 139(2)(a)

F11 S. 93(4A) inserted (with effect in accordance with s. 139(5) of the amending Act) by Finance Act 2016 (c. 24), s. 139(2)(b)

F12 S. 93(5) repealed (with effect as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), ss. 104(1), 113, Sch. 18 Pt. VII

F13 Words in s. 93(6)(d) substituted (with effect as mentioned in s. 193(4) of the amending Act) by Finance Act 1996 (c. 8), s. 193(3)

F14 Words in s. 93(7)(a) substituted (with application as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), s. 104(2)(b)

F15 S. 93(10) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 7(2)(e) (with Sch. 11 para. 26)