From 2027, a single tax will replace stamp duty and Stamp Duty Reserve Tax (SDRT) on the purchase of UK securities. The changes, which were confirmed in the Government’s Spring 2025 Tax Update, aim to simplify the current system and improve efficiency.
How will the new single tax work?
The buyer will be responsible for paying the tax, although agents can be appointed to handle payment through a new online portal. A unique taxpayer reference number (UTRN) will be generated when the return is submitted, allowing company registers to be updated immediately, rather than after payment.
The tax will follow existing SDRT rules and apply to shares in UK-incorporated companies, including those with equity-like characteristics. HMRC may also revise how the loan capital exemption is defined to make it easier to apply.
Transfers involving UK securities will remain in scope, even if they take place abroad or involve overseas parties. However, further work will be done to assess the impact of this approach.
Where the value of a transaction is uncertain, buyers can apply online to defer payment, with the deferral period extended from two to four years. An extension may be possible for up to 12 years.
Exemptions and reliefs such as group relief, acquisition relief and intermediary relief will be kept. These will be self-declared via the online system without requiring HMRC approval.
For electronic transactions, payment will be due within 14 days. For manual transfers, the deadline will be 30 days from the earlier of substantial performance or completion. This replaces the proposed shorter 14-day deadline after public feedback.
Additional changes
The current £1,000 minimum for stamping documents will be removed. Forms such as stock transfer or share buyback certificates will be available from the portal with the UTRN included.
Transfers of partnership interests that include shares or securities will no longer be taxed under the new regime. Anti-avoidance measures will be introduced to prevent misuse.
Next steps
A formal enforcement system will apply to the new tax. Late filing penalties will be based on a percentage rather than fixed amounts.
HMRC is also consulting on the 1.5% higher rate for certain overseas transfers, with the aim of simplifying legislation and improving clarity.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.
