96Clearance services [F1: 1.5% charge] U.K.
(1)F2... There shall be a charge to stamp duty reserve tax under this section where —
(a)a person (A) whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities has entered into an arrangement to provide such clearance services for another person, and
(b)in pursuance of the arrangement, chargeable securities are transferred F3... to A or to a person whose business is or includes holding chargeable securities as nominee for A.
[F4(1A)The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—
(a)subsection (5) of this section (exception so far as stamp duty is chargeable);
(b)section 97 (general exceptions);
(c)section 97ZA (exception for replacement securities);
(d)section 97A (election for alternative system of charge);
(e) section 97AB (exempt capital-raising transfers);
(f) section 97AC (exempt listing transfers);
(g) section 97AD (exception for transfers of shares held by issuing company);
(h)section 97B (transfers between depositary receipt system and clearance system).]
(2)Subject to subsections [F5(4) and] (5) below, tax under this section shall be charged at the rate of [F61.5 per cent.] of the following —
F7(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)in a case where the securities are transferred for consideration in money or money's [F8worth—
(i)the amount or value of the consideration, or
(ii)where subsection (2A) 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.
[F9(2A)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 A or (as the case may be) to the person whose business is or includes holding chargeable securities as nominee for A, 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.]
F10(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)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 (2)(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 or a person whose business is or includes holding chargeable securities as nominee for A,
(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 (2)(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.
(5)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 [F11subsections (2) and] (4) 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.
(6)Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (7) below) be A.
(7)Where tax is charged under the preceding provisions of this section in a case where securities are transferred to a person other than A, and at the time of the transfer A 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.
F12(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)For the purposes of subsection (2)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.
(10)For the purposes of [F13subsection (2)(b)(ii) and (c)] above the value of securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred.
F14(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F15(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13)Subject to subsection (14) below, this section applies where securities are transferred or issued after 18th March 1986 (whenever the arrangement was made).
(14)This section does not apply, in the case of securities which are transferred, if the Board are satisfied —
(a)that on or before 18th March 1986 the transferor (or, where the transferor transfers as agent, the principal) agreed to sell securities of the same kind and amount to the person (other than A) referred to in subsection (1)(a) above, and
(b)that the transfer is effected in pursuance of that agreement.
Textual Amendments
F1Words in s. 96 heading heading inserted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by Finance Act 2024 (c. 3), Sch. 11 para. 11(2)(a) (with Sch. 11 para. 27)
F2Words in s. 96(1) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (. 3), Sch. 11 para. 11(2)(b)(i) (with Sch. 11 para. 27)
F3Words in s. 96(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. 11(2)(b)(ii) (with Sch. 11 para. 27)
F4S. 96(1A) inserted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by Finance Act 2024 (c. 3), Sch. 11 para. 11(2)(c) (with Sch. 11 para. 27)
F5Words in s. 96(2) substituted (with application as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), s. 104(4)(a)
F6Words in s. 96(2) substituted (with effect in accordance with s. 194(7) of the amending Act) by Finance Act 1996 (c. 8), s. 194(4)(a)
F7S. 96(2)(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. 11(2)(d) (with Sch. 11 para. 27)
F8Words in s. 96(2)(b) substituted (with effect in accordance with s. 139(5) of the amending Act) by Finance Act 2016 (c. 24), s. 139(4)(a)
F9S. 96(2A) inserted (with effect in accordance with s. 139(5) of the amending Act) by Finance Act 2016 (c. 24), s. 139(4)(b)
F10S. 96(3) repealed (with application as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), ss. 104(3), 113, Sch. 18 Pt. VII
F11Words in s. 96(5)(a) substituted (with application as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), s. 104(4)(b)
F12S. 96(8) 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. 11(2)(e) (with Sch. 11 para. 27)
F13Words in s. 96(10) substituted (with effect in accordance with s. 139(5) of the amending Act) by Finance Act 2016 (c. 24), s. 139(4)(c)
F14S. 96(11) repealed (with application as mentioned in s. 104(5) of the amending Act) by Finance Act 1997 (c. 16), ss. 104(4)(c), 113, Sch. 18 Pt. VII
F15S. 96(12) repealed (with effect as mentioned in s. 194(7) of the amending Act) by Finance Act 1996 (c. 8), ss. 194(5), 205, Sch. 41 Pt. VII