UK and International Tax news
Tax Update 2026: Modernising Stamp Duty on Shares
Friday 24th July 2026
The government has published a policy paper and draft legislation on its proposal to modernise the current system of stamp duty and stamp duty reserve tax on shares with a single tax on transfers of securities. The Securities Transfer Tax [STT] will be a modern, digital, self-assessed tax, to be introduced in 2027.
This measure will simplify and fully digitise the administration and payment of tax on transactions in securities and ensure that all transactions are taxed under a comprehensive digital system. It will remove the need for non-electronic instruments and paper-based reporting and payment processes.
The government will also clarify the treatment of a small residual population of pre-2003 land transactions currently within the stamp duty regime, as part of the wider modernisation programme.
In November 2018, an initial consultation on changes to the stamp taxes on shares [STS] consideration rules was launched. It concluded that it was necessary to consider the STS framework as a whole. A Call for Evidence was published in July 2020 and this explored design principles and options for the modernisation of STS, with the response published in July 2021.
HMRC subsequently established an industry working group in November 2021 to consider the shape of possible modernisation reforms. From those discussions, a formal consultation was undertaken in 2023 with the proposed replacement of SD and SDRT with a single STT. The government confirmed its intention to proceed with a STS in April 2025 and also launched a consultation on the rules for the higher 1.5% rate of tax. A summary of the responses to that consultation has now been published.
The government is now aiming to introduce the single tax, legislative framework and the portal in 2027. An update on the commencement date will be provided this autumn.
Transitional arrangements will apply to transfers of securities entered into before the commencement date to which SD or SDRT applies but is not due to be reported or paid until on or after that date.
These transitional arrangements for SD and SDRT through savings provisions will apply for a period of four years from the commencement of the STT.
The consultation on the draft legislation will close of 7 September 2026, and legislation will be introduced in Finance Bill 2026-27 to enable commencement of the STT in 2027.
If you would like more detail on any of the above, please contact Keith Rushen on 0207 486 2378.
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