Advanced Taxation (UK) · Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Stamp Duty on Shares and Marketable Securities for ACCA ATX-UK

Updated 11 October 2026 · Fact-checked

Stamp duty is a tax on a paper stock transfer form (and the document must be stamped). It is charged at 0.5% of the consideration, rounded up to the nearest £5. The tax tables give the 0.5% rate. You must know the rounding, the £1,000 threshold and the group exemption.

Understand Stamp Duty on Shares and Marketable Securities

Stamp duty is a tax on documents, not on transactions. When shares are transferred by a stock transfer form, the document is stamped and duty is paid on the price paid (the consideration). The buyer normally pays it.

The tax tables give one figure for shares: 0.5%. Everything else in this topic is rule knowledge that the tables do not give you.

The duty is rounded up to the next multiple of £5. So duty of £1,252 becomes £1,255. If the duty is already an exact multiple of £5, it does not change.

No duty is charged where the consideration is £1,000 or less and the transfer document carries the right certificate that the transaction is within that limit. Above £1,000, duty is charged on the whole amount, not just the excess.

There are reliefs and exclusions. The one examined most is a transfer between companies in a 75% group (a parent and its 75% subsidiaries, and fellow subsidiaries). The relief applies where the transferor and transferee are in a 75% group relationship, and it is given only if it is claimed. The relationship is not the same as the "associated company" test used for corporation tax limits. The group test looks at ownership, including indirect ownership, and beneficial entitlement.

Relief can be withdrawn if the companies leave the group within a set period (3 years) after the transfer. Warn the client about this when advising on a group transfer.

A gift of shares with no consideration is outside the charge. This is not a special exemption. Duty is based on the consideration, so with none there is nothing to charge.

Stamp duty applies to paper transfers. Electronic share dealings are charged to stamp duty reserve tax (SDRT) instead, also at 0.5%. SDRT is not rounded to £5 and has no £1,000 threshold. Know which one applies from the facts in the question.

Key rules to remember

Stamp duty on shares: Duty = 0.5% × consideration, rounded up to the nearest £5; The 0.5% rate is in the tax tables. The rounding is not, so you must remember it.
Rounding rule: Round UP to the next £5 (an exact multiple stays unchanged); Example: duty of £1,251 rounds up to £1,255. Duty of £1,250 stays at £1,250.
Small transfer threshold: Consideration of £1,000 or less (with certificate) = no duty; Above £1,000 the duty is on the full consideration.
Group exemption: Transfer between companies in a 75% group = relieved from duty, if claimed; It requires a 75% group relationship (ownership, including indirect, and beneficial entitlement). Relief can be withdrawn if the companies leave the group within 3 years of the transfer.
Who pays: Buyer (transferee) normally pays stamp duty; State this clearly when advising a buyer or a seller.

How to solve Stamp Duty on Shares and Marketable Securities questions

Use this method for any question asking for stamp duty on a share transfer.

1Check how the shares are transferred. Paper stock transfer form means stamp duty. Electronic transfer means SDRT.
2Find the consideration. Use the price actually paid or the value given. Note whether it is cash, shares or the assumption of debts.
3Check for exemption. Is it a transfer between group companies, a gift, or consideration of £1,000 or less?
4Compute 0.5% of the consideration. Use the rate from the tax tables.
5Round the duty up to the nearest £5.
6State who pays (normally the buyer) and any deadline or claim needed for relief.
7Add one sentence of advice if the facts allow, for example that group relief should be claimed or that structuring a transfer may reduce the cost.

Quickest way: One-line stamp duty check

When to use it: Use when a Section B or Section A question asks for the stamp duty on a share purchase and you have limited time.

Multiply the price by 0.005.
Round up to the nearest £5 and write the final figure.
Write one line saying who pays and whether any exemption applies.

Common mistakes in Stamp Duty on Shares and Marketable Securities

Rounding down or to the nearest £5
Students are used to rounding to the nearest pound in other taxes.
Fix: Always round stamp duty up to the next multiple of £5.
Charging duty only on the amount above £1,000
Students treat the £1,000 limit like a nil rate band.
Fix: It is a threshold. Above it, duty is on the whole consideration.
Applying stamp duty to electronic share purchases
Both taxes charge 0.5%, so they look the same.
Fix: Paper transfer is stamp duty. Electronic is SDRT. SDRT has no £5 rounding and no £1,000 threshold.
Charging the seller
Other taxes in the paper, like CGT, fall on the seller.
Fix: Stamp duty falls on the buyer unless the contract says otherwise.
Ignoring the group exemption
Students focus on the arithmetic and miss that both companies are in a 75% group.
Fix: Read the facts for group links before calculating. If the exemption applies, the duty is nil, subject to claim.

Worked examples

Example 1

Rohan buys 10,000 shares in Pine Ltd from a seller on a paper stock transfer form for £2.51 per share. Compute the stamp duty payable.

Show the solution

Consideration = 10,000 × £2.51 = £25,100.
Duty at 0.5% = £25,100 × 0.005 = £125.50.
Round up to the nearest £5 = £130.
The buyer, Rohan, pays the duty.

Answer: Stamp duty is £130, paid by Rohan.

Example 2

Alpha Ltd owns 80% of Beta Ltd. Alpha Ltd transfers shares in Gamma Ltd, valued at £300,000, to Beta Ltd for £300,000 on a paper transfer form. Advise on the stamp duty.

Show the solution

Alpha Ltd and Beta Ltd are in a 75% group because Alpha owns 80%, which is at least 75%.
A transfer between group companies is relieved from stamp duty, if the relief is claimed.
Without relief the duty would have been £300,000 × 0.5% = £1,500, which is already a multiple of £5.
With the claim, the duty is nil.

Answer: No stamp duty is payable if group relief is claimed. Without it the duty would be £1,500.

Exam tips

Write the 0.5% rate and the £5 rounding as a labelled line in your answer. Marks are given for each step.
Always say whether the transfer is paper or electronic. This is often the hidden decision in the question.
If the question mentions companies, check for a 75% group link before computing anything.
Give a short practical conclusion for professional skills marks, such as who pays and when the relief must be claimed.

Practice questions from Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Stamp Duty on Shares and Marketable Securities in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CS ProfessionalStamp Duty on Agreements, Deeds and Instruments

Stamp Duty on Shares and Marketable Securities: frequently asked questions

What is the rate of stamp duty on shares in ATX-UK?

The rate is 0.5% of the consideration. It is given in the tax tables. You must remember the rounding and the exemptions yourself.

How is stamp duty on shares rounded?

Duty is rounded up to the next multiple of £5. For example, £125.50 becomes £130. An amount that is already a multiple of £5 stays the same.

Is there a £1,000 threshold for stamp duty?

Yes. Where the consideration is £1,000 or less and the right certificate is given, no duty is charged. Above that level, duty is charged on the whole price.

Are transfers between group companies exempt from stamp duty?

Transfers between companies in a 75% group are relieved, provided the relief is claimed and the group relationship exists. Check the facts for the ownership percentage.