Finance Act 1986 (c. 41)

Part IV U.K. Stamp Duty Reserve Tax

Modifications etc. (not altering text)

C1 Pt. 4: construed as one with 1999 c. 16, Pt. VI (27.7.1999) by Finance Act 1999 (c. 16), s. 123(1)

C2 Pt. 4: power to restrict conferred (27.7.1999) by Finance Act 1999 (c. 16), s. 119 (with s. 123(4))

C3 Pt. 4: power to extend conferred (1.5.1995) by Finance Act 1995 (c. 4), s. 152(2)(b)(6)

C4 Pt. 4: 2019 c. 1, s. 48 construed as one with this Part (with effect in accordance with s. 48(12) of the amending Act) by Finance Act 2019 (c. 1), s. 48(11)

C5 Pt. 4: 2019 c. 1, s. 48A construed as one with this Part by 2019 c. 1, s. 48A(9) (as inserted (22.7.2020) by Finance Act 2020 (c. 14), s. 78)

General U.K.

98 Administration etc. U.K.

(1) The Treasury may make regulations —

(a) providing that provisions of the Taxes Management Act 1970 M1 specified in the regulations shall apply in relation to stamp duty reserve tax as they apply in relation to a tax within the meaning of that Act, with such modifications (specified in the regulations) as they think fit;

(b) making with regard to stamp duty reserve tax such further provision as they think fit in relation to administration, assessment, collection and recovery.

[F1 (1A) The power conferred on the Treasury by subsection (1) above includes power to make provision conferring or imposing on the Board functions which involve the exercise of a discretion.]

(2) The power to make regulations under subsection (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Textual Amendments

F1 S. 98(1A) inserted (29.4.1996) by Finance Act 1996 (c. 8), s. 195

Modifications etc. (not altering text)

C6 S. 98(1) extended (retrospectively) by Finance Act 1999 (c. 16), ss. 121 (with s. 123(4))

Marginal Citations

M1 1970 c. 9.

99 Interpretation U.K.

(1) This section applies for the purposes of this Part of this Act.

[F2 (1A) “Bearer instrument” has the same meaning as in Schedule 15 to the Finance Act 1999.

• An instrument is a “UK bearer instrument” or “non-UK bearer instrument” according to whether it is issued by or on behalf of a UK company or a non-UK company within the meaning of that Schedule.]

(2) “The Board” means the Commissioners of Inland Revenue.

[F3 (3) Subject to the following provisions of this section, “chargeable securities” means —

(a) stocks, shares or loan capital,

(b) interests in, or in dividends or other rights arising out of, stocks, shares or loan capital,

(c) rights to allotments of or to subscribe for, or options to acquire, stocks, shares or loan capital, and

(d) units under a unit trust scheme.

(4) “Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above which are issued or raised by a body corporate not incorporated in the United Kingdom unless —

(a) they are registered in a register kept in the United Kingdom by or on behalf of the body corporate by which they are issued or raised, or

(b) in the case of shares, they are paired with shares issued by a body corporate incorporated in the United Kingdom, or

(c) in the case of securities falling within paragraph (b) or (c) of subsection (3) above, paragraph (a) or (b) above applies to the stocks, shares or loan capital to which they relate [F4 , or

(d) they are issued or raised by [F5 a UK Societas] (whether or not in the course of its formation in accordance with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)) F6 ....

(4A) “Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above if—

(a) they are securities issued or raised by an SE (whether or not in the course of its formation in accordance with Article 2 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea), F7 ...

F7 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F8 (4B) Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) which are admitted to trading on a recognised growth market but not listed on that or any other market.

(4C) In subsection (4B), “listed” and “recognised growth market” are to be construed in accordance with section 99A.]

[F9 (5) “Chargeable securities” does not include securities falling within paragraph (a), (b) or (c) of subsection (3) above if—

(a) in the case of stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities), they are securities the transfer of which is exempt from all stamp duties;

(b) in any other case, they are securities the transfer of which, disregarding that section, would be exempt from all stamp duties.

(5ZA) “Chargeable securities” does not include securities falling within paragraph (b) or (c) of subsection (3) above if the stocks, shares or loan capital to which the securities relate—

(a) are stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities) the transfer of which is exempt from all stamp duties, or

(b) are securities the transfer of which, disregarding that section, would be exempt from all stamp duties.]

[F10 (5A) “Chargeable securities” does not include a unit under a unit trust scheme if—

(a) all the trustees under the scheme are resident outside the United Kingdom and the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme; or

(b) under the terms of the scheme the trust property can only be invested in exempt investments.

(5B) For the purposes of subsection (5A)(b)—

(a) an investment other than an interest under a collective investment scheme is an exempt investment if, and only if—

(i) it is not an investment on the transfer of which ad valorem stamp duty would be chargeable,F11 ...

[F12 (ia) it is not an investment on the acquisition of which stamp duty land tax would be chargeable under Part 4 of the Finance Act 2003, and]

(ii) it is not a chargeable security;

(b) an interest under a collective investment scheme is an exempt investment [F13 , unless subsection (5C) applies to the scheme;]

(c) a derivative is an exempt investment if, and only if, it relates wholly to one or more exempt investments; and

(d) funds held for the purposes of the day to day management of the unit trust scheme are not regarded as investments.

F14 ...]

[F15 (5C) This subsection applies to a collective investment scheme if more than 20% of the market value of the investments in which the property subject to the scheme is invested is attributable to investments which are not exempt investments for the purposes of subsection (5A)(b).

(5D) In subsections (5B) and (5C) “collective investment scheme” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000.]

(6) “Chargeable securities” does not include interests in depositary receipts for stocks or shares.

(6A) For the purposes of subsection (4) above, shares issued by a body corporate which is not incorporated in the United Kingdom (“the foreign company”) are paired with shares issued by a body corporate which is so incorporated (“the UK company”) where —

(a) the articles of association of the UK company and the equivalent instruments governing the foreign company each provide that no share in the company to which they relate may be transferred otherwise than as part of a unit comprising one share in that company and one share in the other, and

(b) such units have been offered for sale to the public in the United Kingdom and, at the same time, an equal number of such units have been offered for sale to the public at a broadly equivalent price in the country in which the foreign company is incorporated.]

(7) A depositary receipt for stocks or shares is an instrument acknowledging —

(a) that a person holds stocks or shares or evidence of the right to receive them, and

(b) that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to stocks or shares of the same kind, including the right to receive such stocks or shares (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,

except that a depositary receipt for stocks or shares does not include an instrument acknowledging rights in or in relation to stocks or shares if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.

(8) The Treasury may by regulations provide that for subsection (7) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt; and the power to make regulations under this subsection shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

(9) “Unit” [F16 (except in subsection (6A) above)] and “unit trust scheme” have the same meanings as in Part VII of the Finance Act 1946 M2 .

[F17 (9A) But “unit trust scheme” does not include arrangements [F18 to which section 564G of the Income Tax Act 2007] [F19 or section 507 of the Corporation Tax Act 2009] (alternative finance investment bonds) [F20 applies].]

(10) In interpreting “chargeable securities” in sections 93, 94 [F21 95,] [F22 , 96 [F23 , 97] and 97A], [F24 97ZA] above —

[F25 (a) paragraph (a) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored, and]

(b) the effect of [F26 section 133(3) of the Companies Act 2006 (transactions in shares registered in overseas branch register)] shall be ignored for the purposes of subsection (5) above.

[F27 (11) In interpreting “chargeable securities” in section 93 or 96 above in a case where —

(a) newly subscribed shares, or

(b) securities falling within paragraph (b) or (c) of subsection (3) above which relate to newly subscribed shares,

are issued in pursuance of an arrangement such as is mentioned in that section (or an arrangement which would be such an arrangement if the securities issued were chargeable securities), paragraph (b) of subsection (4) above and the reference to that paragraph in paragraph (c) of that subsection shall be ignored.

(12) In subsection (11) above, “newly subscribed shares” means shares issued wholly for new consideration in pursuance of an offer for sale to the public.]

[F28 (13) Where the calculation of any tax in accordance with the provisions of this Part results in an amount which is not a multiple of one penny, the amount so calculated shall be rounded to the nearest penny, taking any½p as nearest to the next whole penny above.]

Textual Amendments

F2 S. 99(1A) inserted (with application as mentioned in s. 113(4) of the amending Act) by Finance Act 1999 (c. 16), s. 113(3),{Sch. 16 para. 9} (with s. 123(4))

F3 S. 99(3)-(6) substituted (with application as mentioned in s. 144(6) of the amending Act) by Finance Act 1988 (c. 39) {s. 144(2)}

F4 S. 99(4)(d) and word and (4A) added (with effect in accordance with s. 57(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 57(1)

F5 Words in s. 99(4)(d) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 4(2)(a)(i) (with regs. 39-41, 42); 2020 c. 1, Sch. 5 para. 1(1)

F6 Words in s. 99(4)(d) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 4(2)(a)(ii) (with regs. 39-41, 42); 2020 c. 1, Sch. 5 para. 1(1)

F7 S. 99(4A)(b) and word omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 4(2)(b) (with regs. 39-41, 42); 2020 c. 1, Sch. 5 para. 1(1)

F8 S. 99(4B)(4C) inserted (with effect in accordance with Sch. 24 para. 4 of the amending Act) by Finance Act 2014 (c. 26), Sch. 24 para. 2

F9 S. 99(5)(5ZA) substituted for s. 99(5) (1.12.2003) by The Stamp Duty and Stamp Duty Land Tax (Consequential Amendment of Enactments) Regulations 2003 (S.I. 2003/2868), regs. 1, 5(2)

F10 S. 99(5A)(5B) inserted (6.2.2000) by Finance Act 1999 (c. 16), s. 112(4), Sch. 19 para. 12(3)

F11 Word in s. 99(5B)(a)(i) omitted (1.12.2003) by virtue of The Stamp Duty and Stamp Duty Land Tax (Consequential Amendment of Enactments) Regulations 2003 (S.I. 2003/2868), regs. 1, 5(3)

F12 S. 99(5B)(a)(ia) inserted (1.12.2003) by The Stamp Duty and Stamp Duty Land Tax (Consequential Amendment of Enactments) Regulations 2003 (S.I. 2003/2868), regs. 1, 5(3)

F13 Words in s. 99(5B)(b) substituted (24.7.2011) by Finance Act 2011 (c. 11), s. 84(2)(a)(4)

F14 Words in s. 99(5B) omitted (24.7.2011) by virtue of Finance Act 2011 (c. 11), s. 84(2)(b)(4)

F15 S. 99(5C)(5D) inserted (24.7.2011) by Finance Act 2011 (c. 11), s. 84(3)(4)

F16 Words in s. 99(9) inserted (with application as mentioned in s. 144(6) of the amending Act) by Finance Act 1988 (c. 39), s. 144(3)

F17 S. 99(9A) inserted (with effect in accordance with s. 154(6) of the amending Act) by Finance Act 2008 (c. 9), s. 154(4)

F18 Words in s. 99(9A) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 197(a) (with Sch. 9 paras. 1-9, 22)

F19 Words in s. 99(9A) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 325 (with Sch. 2 Pts. 1, 2)

F20 Word in s. 99(9A) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 197(b) (with Sch. 9 paras. 1-9, 22)

F21 Words in s. 99(10) inserted (with application as mentioned in s. 151(6)) of the amending Act) by Finance Act 1998 (c. 36), s. 151(5)(a)

F22 Words in s. 99(10) substituted (1.7.1996) by Finance Act 1996 (c. 8), s. 196(5)(6)

F23 Words in s. 99(10) inserted (with application as mentioned in s. 151(6)) of the amending Act) by Finance Act 1998 (c. 36), s. 151(5)(b)

F24 Word in s. 99(10) substituted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by Finance Act 2024 (c. 3), Sch. 11 para. 22

F25 S. 99(10)(a) substituted (with application in accordance with s. 144(6) of the amending Act) by Finance Act 1988 (c. 39), s. 144(4)

F26 Words in s. 99(10)(b) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 7(f)

F27 S. 99(11)(12) added (with application as mentioned in s. 144(6) of the amending Act) by Finance Act 1988 (c. 39), s. 144(5)

F28 S. 99(13) added (29.4.1996) by Finance Act 1996 (c. 8), s. 194(6)

Modifications etc. (not altering text)

C7 S. 99 modified by S.I. 1997/1156, reg. 4 (as substituted (6.2.2000) by S.I. 1999/3261, reg. 5)

Marginal Citations

M2 1946 c. 64.

[F29 99A Section 99(4B): “listed” and “recognised growth market” U.K.

(1) This section applies for the purposes of section 99(4B).

(2) Section 1005(3) to (5) of the Income Tax Act 2007 (meaning of “listed” etc) applies as it applies in relation to the Income Tax Acts.

(3) “Recognised growth market” means a market recognised as a growth market by the Commissioners for Her Majesty's Revenue and Customs.

(4) On an application made by a market, the market is to be recognised by the Commissioners as a growth market if, and only if, the Commissioners are satisfied, on the basis of evidence provided by the market, that the market qualifies for recognition.

(5) A market qualifies for recognition at any time (“the relevant time”) if it is a recognised stock exchange [F30 or a qualifying UK multilateral trading facility] which meets one or both of the following conditions—

(a) a majority of the companies whose stock or marketable securities are admitted to trading on the market are companies with market capitalisations of less than [F31 £450 million];

(b) the Commissioners are satisfied that the admission requirements of the market include provision requiring companies to demonstrate compounded annual growth in gross revenue or employment of at least 20% over the last three periods of account preceding admission (“the pre-admission periods”).

(6) In subsection (5)—

• “period of account” of a company means a period for which the company draws up accounts;

• “recognised stock exchange” has the meaning given by section 1005(1) of the Income Tax Act 2007;

• [F32 “UK multilateral trading facility” has the meaning given by Article 2.1.14A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments as it forms part of assimilated law.]

[F33 (6A) For the purposes of subsection (5) a UK multilateral trading facility is “qualifying” if—

(a) it is operated by an investment firm within the meaning given by article 3(1) of The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), and

(b) the investment firm has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity (within the meaning of that Act) of operating a multilateral trading facility.]

(7) For the purposes of subsection (5)(a) a company's market capitalisation at the relevant time is the average of the closing market capitalisations of the company on the last trading day of each calendar month (or part of a calendar month) in the qualifying period.

(8) “The qualifying period” means whichever is the shorter of—

(a) the last three calendar years preceding the relevant time, or

(b) the period beginning with the day on which the company is admitted to trading on the market and ending at the end of the last calendar year preceding the relevant time.

(9) For the purposes of subsection (5)(a), a company is to be disregarded if it is admitted to trading on the market in the calendar year in which the relevant time falls.

(10) In the case of a company with a market capitalisation in a currency other than sterling, the closing market capitalisation for the last trading day of any calendar month is to be taken, for the purposes of subsection (7), to be the sterling equivalent of that capitalisation (calculated by reference to the spot rate of exchange for that last trading day).

(11) For the purposes of subsection (5)(b), the percentage of the compounded annual growth in gross revenue over the pre-admission periods is calculated by applying the formula—

where—

“EV” is the company's gross revenue for the last of the pre-admission periods,

“BV” is the company's gross revenue for the period of account immediately preceding the pre-admission periods.

(12) For those purposes, the percentage of the compounded annual growth in employment over the pre-admission periods is calculated by applying the formula—

where—

“EV” is the number of employees of the company at the end of the last of the pre-admission periods,

“BV” is the number of employees of the company at the end of the period of account immediately preceding the pre-admission periods.

(13) The Treasury may by regulations—

(a) make provision for the revocation by the Commissioners of a recognition under this section and about the consequences of a revocation;

(b) amend this section so as to add, remove or alter a condition which must be met in relation to a market for it to be recognised by the Commissioners under this section.

(14) Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.

(15) The power to make regulations under this section is exercisable by statutory instrument, and any statutory instrument containing such regulations is subject to annulment in pursuance of a resolution of the House of Commons.

(16) This section is to be construed as one with the Stamp Act 1891.]

Textual Amendments

F29 S. 99A inserted (28.4.2014 for specified purposes, 17.7.2014 in so far as not already in force) by Finance Act 2014 (c. 26), Sch. 24 paras. 3, 4(2)(3)

F30 Words in s. 99A(5) inserted (1.1.2024) by Finance Act 2024 (c. 3), s. 19(2)(a)(5)

F31 Sum in s. 99A(5)(a) substituted (1.1.2024) by Finance Act 2024 (c. 3), s. 19(2)(b)(5)

F32 Words in s. 99A(6) inserted (1.1.2024) by Finance Act 2024 (c. 3), s. 19(3)(5)

F33 S. 99A(6A) inserted (1.1.2024) by Finance Act 2024 (c. 3), s. 19(4)(5)