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

Stamp Duty Reserve Tax (SDRT) for ATX-UK

Updated 11 October 2026 · Fact-checked

SDRT is a 0.5% tax on an agreement to transfer chargeable securities, such as shares. It is mainly paid by the buyer. It catches paperless transfers, for example through CREST, where no stamp duty document exists. In the exam, compute 0.5% of the price and say who pays.

Understand Stamp Duty Reserve Tax (SDRT)

Stamp duty is charged on a document, the stock transfer form. If a share deal has no document, stamp duty cannot bite. SDRT was created to fill that gap. It is charged on the agreement to transfer shares, not on a document.

The ATX-UK tax tables give one rate for stamp duty on shares: 0.5%. SDRT is charged at the same 0.5% rate. You will not find a separate SDRT rate in your tax tables. Know it from the stamp duty line and from your notes.

The usual case is a paperless trade, where shares are settled electronically through CREST. The buyer is the person who pays. The tax arises when the agreement is made, and electronic settlement normally collects it for you. The tax is not an extra layer on top of stamp duty in the same deal.

The two taxes are alternatives. If a stock transfer form is signed and stamped within the time allowed, any SDRT on the same deal is cancelled or refunded. So the same sale is not taxed twice. In practice, you charge one 0.5% on the consideration, by whichever route applies.

In ATX, stamp taxes are usually a small part of a larger scenario. Typical settings are a share purchase by a client or company, a share-for-asset comparison, or a buy-out. A short, accurate point on 0.5% and who pays picks up easy marks.

Key rules to remember

SDRT charge
SDRT = 0.5% × consideration for the agreement to transfer chargeable securities
The tax tables show 0.5% for stamp duty on shares. SDRT uses the same rate. Work out the tax on the price paid.
Stamp duty on shares (tax table)
Stamp duty on shares = 0.5%
This is the line you are given in the tax tables. Use it as the base rate for both taxes.
Stamp duty versus SDRT
Stamped transfer document → stamp duty; agreement with no document → SDRT
They are alternatives for the same deal. Do not add them together.
Who pays
Payer = the buyer (purchaser)
The transferee bears the tax on a normal purchase.

How to solve Stamp Duty Reserve Tax (SDRT) questions

Use this method for any question on the stamp taxes charged on a share purchase.

  1. 1Identify the asset. Check that it is shares or other chargeable securities. Land is a different tax, SDLT.
  2. 2Identify the transaction. Is it a sale for consideration, a gift, or an issue of new shares? Work out the price actually paid.
  3. 3Decide the route. A stock transfer form means stamp duty. A paperless or electronic trade, or an agreement with no document, means SDRT.
  4. 4Calculate 0.5% of the consideration. Use the rate from the tax table.
  5. 5Name the person liable. This is normally the buyer, so state clearly that the seller has no charge.
  6. 6Check for double counting. State that stamping the transfer in time cancels or refunds the SDRT on the same deal.
  7. 7Present the answer. Give the figure, the label of the tax, and one line of reasoning for the marks.

Quickest way: Three-line SDRT answer

When to use it: Use this when stamp taxes are a small part of a Section A or B scenario and you have only a couple of minutes.

  1. Write: shares bought, so 0.5% applies to the price.
  2. Write the calculation: price × 0.5% = the tax, and say it is paid by the buyer.
  3. Add one line: SDRT if paperless, stamp duty if a transfer form is used, not both.

Common mistakes in Stamp Duty Reserve Tax (SDRT)

  • Charging both stamp duty and SDRT on the same share purchase.

    Students see two taxes and assume both apply.

    Fix: State that they are alternatives. One 0.5% charge applies to the deal.

  • Saying the seller pays.

    Many taxes, such as CGT, fall on the seller, so students assume the same here.

    Fix: The buyer is the person who normally pays. Say so in your answer.

  • Looking for a separate SDRT rate in the tax tables.

    The tables list only stamp duty on shares, so students think SDRT is missing.

    Fix: Use 0.5%, which matches the stamp duty on shares rate in the tables.

  • Applying SDLT bands to a share purchase.

    Stamp taxes are listed together and the SDLT bands look more detailed.

    Fix: SDLT applies to land. Shares are always a flat 0.5%, with no bands.

  • Calculating the tax on the market value rather than the price paid.

    Students mix this up with the rules for gifts in CGT.

    Fix: Use the consideration given. Re-read the question to see what was actually paid.

Worked examples

Example 1

Priya agrees to buy 10,000 shares in a quoted company for £6 per share. The trade settles electronically through CREST. Calculate the stamp tax and say who pays.

Show the solution
  1. Consideration = 10,000 × £6 = £60,000.
  2. The trade is paperless, so there is no stock transfer form. SDRT applies rather than stamp duty.
  3. SDRT = 0.5% × £60,000 = £300.
  4. The buyer, Priya, is liable. The seller has no charge.

Answer: SDRT of £300, payable by Priya as buyer.

Example 2

Mo buys shares in an unquoted company for £84,000. The parties sign a stock transfer form and it is stamped in time. Calculate the tax and explain how it relates to SDRT.

Show the solution
  1. A transfer document exists, so stamp duty applies.
  2. Stamp duty = 0.5% × £84,000 = £420.
  3. Mo, as buyer, bears the £420.
  4. An SDRT charge arises on the agreement, but stamping the transfer in time cancels it or leads to a refund. The deal bears one charge, not two.

Answer: Stamp duty of £420 payable by Mo. No separate SDRT cost remains.

Exam tips

  • Always give the rate (0.5%), the base (price paid) and the payer (buyer). These are the three marking points.
  • Say clearly that stamp duty and SDRT are alternatives for the same deal.
  • Do not use SDLT bands for shares. Keep land and shares separate in your answer.
  • When comparing a share purchase with an asset purchase, include the stamp tax cost as a numerical line. Show the working.

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

Stamp Duty Reserve Tax (SDRT) in other exams

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

Stamp Duty Reserve Tax (SDRT): frequently asked questions

What is the difference between stamp duty and SDRT?

Stamp duty is charged on a transfer document. SDRT is charged on the agreement to transfer shares, so it catches paperless deals. Both use 0.5%, and they are alternatives for the same deal.

What is the SDRT rate in ATX-UK?

It is 0.5%, the same as stamp duty on shares. The tax tables show this single rate under stamp duty. Apply it to the price paid.

Who pays SDRT on paperless share transfers through CREST?

The buyer normally pays. The tax arises on the agreement to transfer the shares. Electronic settlement systems usually collect it as part of the trade.

Is SDRT charged as well as stamp duty?

No, not on the same deal. If a transfer form is stamped in time, any SDRT is cancelled or refunded. State one 0.5% charge in your answer.