Advanced Taxation (UK) · Taxes applicable to a given situation or course of action and their impact

Stamp Duty and SDRT on Shares in ATX-UK

Updated 11 October 2026 · Fact-checked

Stamp duty and SDRT are taxes on the buyer when shares are transferred for consideration. The rate in the ATX-UK tax tables is 0.5% of the price paid. Stamp duty applies to a paper transfer. SDRT applies to an agreement to transfer, often electronic. You compute 0.5% of the consideration, with the rounding rule below.

Understand Stamp Duty and SDRT on Shares

Stamp duty and stamp duty reserve tax (SDRT) are taxes on the purchase of UK shares. The buyer pays, not the seller. The ATX-UK tax tables give one rate for shares: 0.5%.

The two taxes cover the same transaction in different forms. Stamp duty is charged on a written stock transfer form. SDRT is charged on an agreement to transfer shares, which is how most trades are now settled electronically. In practice, a buyer pays one or the other, not both on the same deal. For exam purposes, treat them as one 0.5% charge on the buyer.

The charge is on the consideration, meaning the price paid. If the buyer pays cash, use the cash amount. If the buyer pays with other shares (a share-for-share deal), the consideration is the value of what the buyer gives up, so the charge can still arise. Do not assume a share exchange is free of stamp taxes. Check what the question says about relief or exemption before you decide.

You should also know the common stamp duty rounding and small-transfer rules. Stamp duty is rounded up to the nearest £5. Stamp duty is not charged where the consideration is £1,000 or less and the transfer is certified as such. These two points are not in the tax table extract, so state them as rules from your studies and apply them only if the question invites it. The rate itself always comes from the tax tables.

Stamp duty on shares is a cost for the buyer and does not apply to the seller. For the buyer, the duty is an incidental cost of acquisition in a later chargeable gains computation. That means the CGT computation for an individual, or the chargeable gains computation within corporation tax for a company. It is not a cost for the seller.

Key rules to remember

Stamp duty or SDRT on share purchase: Duty = 0.5% × consideration; The 0.5% rate for shares is given in the ATX-UK tax tables. It is charged on the buyer.
Rounding of stamp duty: Stamp duty is rounded up to the nearest £5; A rule from your studies, not in the tax table extract. SDRT is calculated to the nearest penny, but ATX-UK says calculations need only be to the nearest £.
£1,000 threshold: No stamp duty if consideration ≤ £1,000 (transfer certified); A rule from your studies, not in the tax table extract. If the price is above £1,000, duty applies on the whole price, not just the excess.
Who pays: Payer = buyer (transferee); The seller bears no stamp duty or SDRT on a share sale.
Tax treatment of the cost: Buyer's cost for a later gain = price + stamp duty paid; Stamp duty is an incidental cost of acquisition in the buyer's later chargeable gains computation: CGT for an individual, chargeable gains in corporation tax for a company.

How to solve Stamp Duty and SDRT on Shares questions

Use this method for any question on stamp duty or SDRT on shares. Most marks come from identifying the right tax and the right person, then calculating once.

1Identify the transaction. Is it a sale of shares for consideration? A gift for nothing normally gives no duty charge on the price.
2Identify who pays. The buyer (transferee) pays stamp duty or SDRT, so say that clearly.
3Work out the consideration. For cash, use the price. For a share-for-share deal, use the value of the shares or other assets given.
4Check the £1,000 threshold. If the consideration is above £1,000, charge duty on the full amount.
5Calculate 0.5% of the consideration. Round stamp duty up to the nearest £5 if the question gives a paper transfer.
6State the effect. Say whether it adds to the buyer's cost for CGT, and note that the seller has no charge.
7If asked for advice, mention planning points such as whether the transaction can be structured differently, and give the cost of each option.

Quickest way: Three-line stamp duty answer

When to use it: Use this when a share purchase appears inside a larger planning question and you only need the stamp tax cost.

Write: buyer pays 0.5% on consideration.
Calculate: consideration × 0.5%, rounding up to £5 for stamp duty.
Add one line: this is part of the buyer's cost, and the seller pays nothing.

Common mistakes in Stamp Duty and SDRT on Shares

Charging the seller instead of the buyer.
Students link all disposals to the seller because CGT falls on the seller.
Fix: Write 'buyer pays' every time. Stamp duty and SDRT are transfer taxes on the purchaser.
Using SDLT bands for a share purchase.
The tax tables show SDLT and stamp duty together under stamp taxes.
Fix: Shares carry a flat 0.5%. The banded rates of 0%, 2% and 5% are for non-residential land and property.
Charging the 0.5% only on the excess over £1,000.
Students treat the £1,000 limit as a nil band like an allowance.
Fix: It is a cut-off. Above £1,000, duty applies to the whole consideration.
Adding both stamp duty and SDRT on the same deal.
Students see two taxes named in the topic and charge both.
Fix: One transaction bears one charge at 0.5%. Say which form applies, or treat it as a single charge.
Ignoring stamp duty in a share-for-share exchange.
Students assume that a deal with no cash has no price.
Fix: Value the shares given as consideration, then apply 0.5% unless the question says a relief applies.
Leaving stamp duty out of the buyer's CGT cost.
Students stop once the duty is calculated.
Fix: Add the duty to the purchase cost in later gain computations.

Worked examples

Example 1

Priya buys 10,000 shares in a UK company from Rahul for £8.40 per share, using a paper stock transfer form. Calculate the stamp duty and say who pays it.

Show the solution

Consideration = 10,000 × £8.40 = £84,000.
The £1,000 threshold is exceeded, so duty applies on the whole £84,000.
Duty = 0.5% × £84,000 = £420.
£420 is already a multiple of £5, so no rounding is needed.
The buyer, Priya, pays the duty. Rahul has no charge.

Answer: Stamp duty is £420, paid by Priya, the buyer. It adds to her cost of the shares for a later CGT computation.

Example 2

Meridian Ltd acquires 25,000 shares in Tarn Ltd from an individual shareholder using a paper stock transfer form. Meridian pays £6.17 per share in cash. Calculate the stamp duty and the total cost to Meridian Ltd.

Show the solution

Consideration = 25,000 × £6.17 = £154,250.
The transfer is on a stock transfer form, so stamp duty applies. Duty = 0.5% × £154,250 = £771.25.
Round up to the nearest £5 for stamp duty: £775.
The buyer, Meridian Ltd, bears the cost.
Total cost = £154,250 + £775 = £155,025.

Answer: Stamp duty is £775. Meridian's total cost is £155,025, and the duty is an incidental cost of acquisition in its later chargeable gains computation.

Exam tips

Write 'buyer pays 0.5%' early. It is a quick mark that students often miss.
Take the 0.5% rate from the tax tables, and use the rounding and £1,000 rules only when the facts fit.
In a restructuring or business exit question, include stamp duty as a cost of the share route and compare it with the asset route and SDLT.
Show the calculation in a visible line, since workings earn marks even if the final figure is slightly off.
In planning advice, tie the stamp cost to the buyer's decision. This earns professional skills marks for commercial awareness.

Practice questions from Taxes applicable to a given situation or course of action and their impact

Stamp Duty and SDRT on Shares in other exams

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

CS ProfessionalIndian Stamp Act, 1899: Stamp Duty and Instruments

Stamp Duty and SDRT on Shares: frequently asked questions

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

The tax tables give 0.5% for shares. It is charged on the consideration paid by the buyer.

What is the difference between stamp duty and SDRT?

Stamp duty applies to a written transfer document. SDRT applies to an agreement to transfer shares, which covers most electronic trades. The rate for shares is 0.5% for both, and one transaction bears one charge.

Does the £1,000 threshold mean the first £1,000 is free?

No. If the consideration is £1,000 or less, no stamp duty is due on a certified transfer. If it is more, duty is charged on the whole amount.

Who pays stamp duty on a share sale?

The buyer pays. The seller has no stamp duty or SDRT charge on the sale.

Is stamp duty on shares the same as SDLT?

No. SDLT is a banded tax on non-residential land and property. Stamp duty on shares is a flat 0.5% on the share price.