Finance Act 1986

• Citation: 1986 c. 41
• Sections: 223

Section 1 Tobacco products.

(1) For the Table in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—

Table

(2) This section shall be deemed to have come into force on 21st March 1986.

Section 2 Hydrocarbon oil.

(1) In section 6(1) of the Hydrocarbon Oil Duties Act 1979 for “£0·1794” (light oil) and “£0·1515” (heavy oil) there shall be substituted “£0·1938” and “£0·1639” respectively.

(2) In subsection (1) of section 11 of that Act (rebate on heavy oil) for paragraphs (a) and (b) there shall be substituted—

(a) in the case of fuel oil, of £0·0077 a litre less than the rate at which the duty is for the time being chargeable;

(b) in the case of gas oil, of £0·0110 a litre less than the rate at which the duty is for the time being chargeable; and

(c) in the case of heavy oil other than fuel oil and gas oil, equal to the rate at which the duty is for the time being chargeable.

(3) For subsection (2) of section 11 of that Act (definition of types of heavy oil), there shall be substituted—

(2) In this section—

“ fuel oil ” means heavy oil which contains in solution an amount of asphaltenes of not less than 0·5 per cent. or which contains less than 0·5 per cent. but not less than 0·1 per cent. of asphaltenes and has a closed flash point not exceeding 150½C; and

“ gas oil ” means heavy oil of which not more than 50 per cent. by volume distils at a temperature not exceeding 240½C and of which more than 50 per cent. by volume distils at a temperature not exceeding 340½C.

(4) This section shall be deemed to have come into force at 6 o’oclock in the evening of 18th March 1986.

Section 3 Vehicles excise duty.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 4 Beer duty: minor amendments.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) After section 49 of the Alcoholic Liquor Duties Act 1979 there shall be inserted the following section—

Drawback allowable to brewer for sale.

(49)

(1) For the purpose of any claim for drawback by a brewer for sale in respect of duty charged on beer, duty which has been determined in accordance with regulations under section 49(1)(bb) above shall be deemed to be duty which has been paid (whether or not it is in fact paid by the time the claim is made).

(2) Subject to such conditions as the Commissioners see fit to impose, drawback allowable to a brewer for sale in respect of beer may be set against any amount to which the brewer is chargeable under section 38 above and, in relation to a brewer for sale, any reference in this Act or the Management Act to drawback payable shall be construed accordingly.

Section 5 Warehousing regulations.

Schedule 3 to this Act (which contains amendments about warehousing regulations) shall have effect.

Section 6 Betting duties and bingo duty in Northern Ireland.

(1) The Betting and Gaming Duties Act 1981 (in this section referred to as “ the 1981 Act ”) shall have effect subject to the amendments in Part I of Schedule 4 to this Act, being amendments designed to extend to Northern Ireland—

(a) the provisions of the 1981 Act relating to general betting duty and pool betting duty (in place of the provisions of Part III of the Miscellaneous Tranferred Excise Duties Act (Northern Ireland) 1972 relating to those duties); and

(b) the provisions of the 1981 Act relating to bingo duty.

(2) Part II of Schedule 4 to this Act shall have effect for the purpose of making consequential amendments of certain Northern Ireland legislation; and Part III of that Schedule shall have effect for the purpose of extending to Northern Ireland certain subordinate legislation made under the 1981 Act.

(3) Schedule 4 to this Act,—

(a) so far as it relates to general betting duty or pool betting duty, shall come into force on the betting commencement date, but shall not have effect in relation to duty in respect of bets made before that date; and

(b) so far as it relates to bingo duty, shall come into force on the bingo commencement date, but shall not impose any charge to duty in respect of bingo played in Northern Ireland before that date.

(4) Part III of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 shall cease to have effect on the betting commencement date except in relation to duty in respect of bets made before that date.

(5) In this section and Schedule 4 to this Act—

“ the betting commencement date ” means 29th September 1986 or, if later, the day appointed for the coming into operation of Part II (betting) of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985; and

“ the bingo commencement date ” means 29th September 1986 or, if later, the day appointed for the coming into operation of Chapter II of Part III (gaming on bingo club premises) of that Order.

Section 7 Betting and gaming duties: evidence by certificate, etc.

After section 29 of the Betting and Gaming Duties Act 1981 there shall be inserted the following section—

Evidence by certificate, etc.

(29A)

(1) A certificate of the Commissioners—

(a) that any notice required by or under this Act to be given to them had or had not been given at any date, or

(b) that any permit, licence or authority required by or under this Act had or had not been issued at any date, or

(c) that any return required by or under this Act had not been made at any date, or

(d) that any duty shown as due in any return or estimate made in pursuance of this Act had not been paid at any date,

shall be sufficient evidence of that fact until the contrary is proved.

(2) A photograph of any document furnished to the Commissioners for the purposes of this Act and certified by them to be such a photograph shall be admissible in any proceedings, whether civil or criminal, to the same extent as the document itself.

(3) Any document purporting to be a certificate under subsection (1) or (2) above shall be deemed to be such a certificate until the contrary is proved.

Section 8 Licences under the customs and excise Acts.

(1) No excise licence duty shall be chargeable on the grant after 18th March 1986 of an excise licence under any of the provisions of the Alcoholic Liquor Duties Act 1979 (licensing of various activities relating to the production of alcoholic liqour) or under section 2 of the Matches and Mechanical Lighters Duties Act 1979 (licensing of manufacture of matches).

(2) The following enactments shall cease to have effect—

(a) sections 12(2), 18(3), . . . and 75(3) of the Alcoholic Liquor Duties Act 1979 and section 2(2) of the Matches and Mechanical Lighters Duties Act 1979 (which provide for certain excise licences, the duty on which is abolished by subsection (1) above, to expire on a specific date in each year); and

(b) section 81 of the Alcoholic Liquor Duties Act 1979 (under which a licence is required for the leeping or using of a still by any person otherwise than as a distiller, rectifier or compounder).

(3) The holder of a licence under any of the enactments specified in subsection (5) below may suurender the licence to the Commissioners of Customs and Excise at any time.

(4) The Commissioners of Customs and Excise may at any time revoke a licence granted in respect of any premises under any of the enactments specified in subsection (5) below if it appears to them that the holder of the licence has ceased to carry on at those premises the activity in respect of which the licence was granted.

(5) The enactments referred to in subsections (3) and (4) above are—

(a) section 12 of the Alcoholic Liquor Duties Act 1979 (distillers),

(b) section 18 of that Act (rectifiers),

(c) section 47 of that Act (brewers),

(d) section 48 of that Act (persons using premises for adding solutions to beer),

(e) section 54 of that Act (wine producers),

(f) section 55 of that Act (made-wine producers), and

(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Schedule 5 to this Act shall have effect for the purpose of supplementing the provisions of this section.

Section 23 Employee share schemes: general amendments.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 24 Approved profit sharing schemes: workers’ co-operatives.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where, for the purpose of securing (and maintaining) approval of its profit sharing scheme in accordance with Part I of Schedule 9 to the Finance Act 1978, the rules of a society which is a workers’ co-operative or which is seeking to be registered under the industrial and provident societies legislation as a workers’ co-operative contain—

(a) provision for membership of the society by the trustees of the scheme,

(b) provision denying voting rights to those trustees, or

(c) other provisions which appear to the registrar to be reasonably necessary for that purpose,

those provisions shall be disregarded in determining whether the society should be or continue to be registered under the industrial and provident societies legislation as a bona fide co-operative society.

(5) In subsection (4) above “ the industrial and provident societies legislation ” means—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the Industrial and Provident Societies Act (Northern Ireland) 1969,

and “ registrar ” has the same meaning as in that Act and “ co-operative society ” has the same meaning as in section 1 of that Act .

Section 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 66 Company's purchase of own shares

(1) This section applies where a company purchases its own shares under section 690 of the Companies Act 2006 ....

(2) Any return which relates to any of the shares purchased and is delivered to the registrar of companies under section 707 of that Act ... shall be charged with stamp duty, and treated for all purposes of the Stamp Act 1891 , as if it were an instrument transferring the shares to which it relates on sale to the company in pursuance of the contract (or contracts) of purchase concerned.

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Subject to subsection (4) below, this section applies to any such return which is delivered to the registrar of companies on or after the day of The Stock Exchange reforms.

(4) This section does not apply to any return to the extent that the shares to which it relates were purchased under a contract entered into before the day of The Stock Exchange reforms.

(5) In this section “ the day of The Stock Exchange reforms ” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Section 67 Depositary receipts 1.5% charge

(1) Subject to subsection (9) below, subsection (2) or (3) below (as the case may be) applies where an instrument ... transfers relevant securities of a company incorporated in the United Kingdom to a person who at the time of the transfer falls within subsection (6), (7) or (8) below.

(1A) For the purposes of subsection (1) “ instrument ” does not include—

(a) a bearer instrument (see subsection (9A));

(b) an exempt capital-raising instrument (see section 72ZA);

(c) an exempt listing instrument (see section 72ZB).

(2) If stamp duty is chargeable on the instrument under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale), the rate at which that duty is chargeable is 1.5% of—

(a) the amount or value of the consideration for the sale to which the instrument gives effect, or

(b) where subsection (2A) applies—

(i) the amount or value of the consideration for the sale to which the instrument gives effect, or

(ii) if higher, the value of the securities at the date the instrument is executed.

(2A) This subsection applies where the instrument transferring the securities is executed pursuant to—

(a) the exercise of an option to buy or to sell the securities, and

(b) either—

(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (6), (7) or (8), or

(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.

(3) If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) —

(a) stamp duty is chargeable on the instrument under this subsection, and

(b) subject to subsection (5), the rate at which that duty is chargeable is 1.5% of the value of the securities at the date the instrument is executed.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In a case where —

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(c) the transfer to the other person is effected by an instrument in the case of which subsection (3) above applies,

(d) before the execution of the instrument mentioned in paragraph (c) above an instrument is received by a person falling (at the time of the receipt) within subsection (6), (7) or (8) below,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the instrument mentioned in paragraph (c) above contains a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (3) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(6) A person falls within this subsection if his business is exclusively that of holding relevant securities —

(a) as nominee or agent for a person whose business is or includes issuing depositary receipts for relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of issuing such depositary receipts (in a case where the business does not consist exclusively of that).

(7) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument, and

(b) his business is or includes issuing depositary receipts for relevant securities.

(8) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument,

(b) he does not fall within subsection (6) above but his business includes holding relevant securities as nominee or agent for a person who falls within subsection (7)(b) above at the time of the transfer, and

(c) he holds relevant securities as nominee or agent for such a person, for the purposes of such part of that person's business as consists of issuing depositary receipts for relevant securities (in a case where that business does not consist exclusively of that).

(8A) Where an instrument transfers shares or stock or marketable securities admitted to trading on a recognised growth market but not listed on any market, subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.

(8B) In subsection (8A) “listed” and “recognised growth market” are to be construed in accordance with section 99A below.

(9) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom —

(a) to a company which at the time of the transfer falls within subsection (6) above . . . , and

(b) from a company which at that time falls within that subsection . . . ,

subsections (2) to (5) above shall not apply and stamp duty is not chargeable on the instrument .

(9ZA) Where an instrument transfers shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise), subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.

(9A) In this section “ bearer instrument ” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.

(10) This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Section 68 Depositary receipts: notification

(1) A person whose business is or includes issuing depositary receipts for relevant securities of a company incorporated in the United Kingdom shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first issues such depositary receipts.

(2) A person whose business includes (but does not exclusively consist of) holding relevant securities (being securities of a company incorporated in the United Kingdom)—

(a) as nominee or agent for a person whose business is or includes issuing depositary receipts for relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of issuing such depositary receipts (in a case where the business does not consist exclusively of that),

shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first holds such relevant securities as such a nominee or agent and for such purposes.

(3) A company which is incorporated in the United Kingdom and becomes aware that any shares in the company are held by a person such as is mentioned in subsection (1) or (2) above shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which the company first becomes aware of that fact.

(4) A person who fails to comply with subsection (1) or (2) above shall be liable to a penalty not exceeding £1,000.

(5) A company which fails to comply with subsection (3) above shall be liable to a penalty not exceeding £100.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 69 Depositary receipts: supplementary

(1) For the purposes of sections 67, 68 and 72ZB a depositary receipt for relevant securities is an instrument acknowledging—

(a) that a person holds relevant securities or evidence of the right to receive them, and

(b) that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to relevant securities of the same kind, including the right to receive such securities (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,

except that for those purposes a depositary receipt for relevant securities does not include an instrument acknowledging rights in or in relation to securities if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.

(2) The Treasury may by regulations provide that for subsection (1) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt for the purposes of sections 67 and 68 above.

(3) References in this section and sections 67 and 68 above to relevant securities, or to relevant securities of a company, are to shares in or stock or marketable securities of any company (which, unless otherwise stated, need not be incorporated in the United Kingdom).

(4) For the purposes of section 67(2)(b)(ii) and (3) above the value of securities at the date the instrument is executed shall be taken to be the price they might reasonably be expected to fetch on a sale at that time in the open market.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) The power to make regulations or an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 70 Clearance services 1.5% charge

(1) Subject to subsection (9) and section 97A below, subsection (2) or (3) below (as the case may be) applies where an instrument ... transfers relevant securities of a company incorporated in the United Kingdom to a person who at the time of the transfer falls within subsection (6), (7) or (8) below.

(1A) For the purposes of subsection (1) “ instrument ” does not include—

(a) a bearer instrument (see subsection (9A));

(b) an exempt capital-raising instrument (see section 72ZA);

(c) an exempt listing instrument (see section 72ZB).

(2) If stamp duty is chargeable on the instrument under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale), the rate at which that duty is chargeable is 1.5% of—

(a) the amount or value of the consideration for the sale to which the instrument gives effect, or

(b) where subsection (2A) applies—

(i) the amount or value of the consideration for the sale to which the instrument gives effect, or

(ii) if higher, the value of the securities at the date the instrument is executed.

(2A) This subsection applies where the instrument transferring the securities is executed pursuant to—

(a) the exercise of an option to buy or to sell the securities, and

(b) either—

(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (6), (7) or (8), or

(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.

(3) If stamp duty is not chargeable on the instrument under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) —

(a) stamp duty is chargeable on the instrument under this subsection, and

b subject to subsection (5), the rate at which that duty is chargeable is 1.5% of the value of the securities at the date the instrument is executed.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In a case where —

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(c) the transfer to the other person is effected by an instrument in the case of which subsection (3) above applies,

(d) before the execution of the instrument mentioned in paragraph (c) above an instrument is received by a person falling (at the time of the receipt) within subsection (6), (7) or (8) below,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the instrument mentioned in paragraph (c) above contains a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (3) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(6) A person falls within this subsection if his business is exclusively that of holding relevant securities —

(a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that).

(7) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument, and

(b) his business is or includes the provision of clearance services for the purchase and sale of relevant securities.

(8) A person falls within this subsection if —

(a) he is specified for the purposes of this subsection by the Treasury by order made by statutory instrument,

(b) he does not fall within subsection (6) above but his business includes holding relevant securities as nominee or agent for a person who falls within subsection (7)(b) above at the time of the transfer, and

(c) he holds relevant securities as nominee or agent for such a person, for the purposes of such part of that person's business as consists of the provision of clearance services for the purchase and sale of relevant securities (in a case where that business does not consist exclusively of that).

(8A) Where an instrument transfers shares or stock or marketable securities admitted to trading on a recognised growth market but not listed on any market, subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.

(8B) In subsection (8A) “listed” and “recognised growth market” are to be construed in accordance with section 99A below.

(9) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom —

(a) to a company which at the time of the transfer falls within subsection (6) above . . . , and

(b) from a company which at that time falls within that subsection . . . ,

subsections (2) to (5) above shall not apply and stamp duty is not chargeable on the instrument .

(9ZA) Where an instrument transfers shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise), subsections (2) to (5) do not apply and stamp duty is not chargeable on the instrument.

(9A) In this section “ bearer instrument ” has the meaning given in paragraph 3 of Schedule 15 to the Finance Act 1999.

(10) This section applies to any instrument executed on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Section 71 Clearance services: notification

(1) A person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities of a company incorporated in the United Kingdom shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first provides such clearance services.

(2) A person whose business includes (but does not exclusively consist of) holding relevant securities (being securities of a company incorporated in the United Kingdom)—

(a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of relevant securities, and

(b) for the purposes of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that),

shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which he first holds such relevant securities as such a nominee or agent and for such purposes.

(3) A company which is incorporated in the United Kingdom and becomes aware that any shares in the company are held by a person such as is mentioned in subsection (1) or (2) above shall notify the Commissioners of that fact before the end of the period of one month beginning with the date on which the company first becomes aware of that fact.

(4) A person who fails to comply with subsection (1) or (2) above shall be liable to a penalty not exceeding £1,000.

(5) A company which fails to comply with subsection (3) above shall be liable to a penalty not exceeding £100.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 72 Clearance services: supplementary

(1) References in sections 70 and 71 above to relevant securities, or to relevant securities of a company, are to shares in or stock or marketable securities of any company (which, unless otherwise stated, need not be incorporated in the United Kingdom).

(2) For the purposes of section 70(2)(b)(ii) and (3) above the value of securities at the date the instrument is executed shall be taken to be the price they might reasonably be expected to fetch on a sale at that time in the open market.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 72A Transfers between depositary receipt system and clearance system.

(1) Where an instrument transfers relevant securities of a company incorporated in the United Kingdom between a depositary receipt system and a clearance system—

(a) the provisions of section 67(2) to (5) or, as the case may be, section 70(2) to (5) above shall not apply, and

(b) stamp duty is not chargeable on the instrument.

(2) A transfer between a depositary receipt system and a clearance system means a transfer—

(a) from (or to) a company that at the time of the transfer falls within section 67(6) above, and

(b) to (or from) a company that at that time falls within section 70(6) above.

(3) This section does not apply to a transfer from a clearance system (that is, from such a company as is mentioned in subsection (2)(b) above) if at the time of the transfer an election is in force under section 97A below in relation to the clearance services for the purposes of which the securities are held immediately before the transfer.

Section 72ZA Meaning of “exempt capital-raising instrument”

(1) For the purposes of sections 67 and 70, an instrument is an “exempt capital-raising instrument” if the instrument transfers relevant securities in the course of capital-raising arrangements.

(2) In this section, “ capital-raising arrangements ” means arrangements pursuant to which relevant securities are issued by a company for the purpose of raising new capital.

(3) An instrument is not prevented from being an exempt capital-raising instrument by reason only of a delay in transferring relevant securities where—

(a) a person (“ the transferor ”) acquires the relevant securities—

(i) before capital-raising arrangements are entered into, or

(ii) in the course of capital-raising arrangements,

(b) the transferor is subject to a restriction that has the effect of preventing the transfer of the relevant securities in the course of the capital-raising arrangements, and

(c) the instrument transfers the relevant securities as soon as reasonably practicable after the time at which the restriction ceases to have effect.

Section 72ZB Meaning of “exempt listing instrument”

(1) For the purposes of sections 67 and 70, an instrument is an “exempt listing instrument” if—

(a) the instrument transfers relevant securities of a company in the course of qualifying listing arrangements, and

(b) those arrangements do not affect the beneficial ownership of the relevant securities.

(2) In this section, “ listing arrangements ” means arrangements pursuant to which relevant securities, or depositary receipts for relevant securities, are listed on a recognised stock exchange.

(3) For the purposes of this section, listing arrangements are “qualifying” if, immediately before the first transfer of relevant securities in the course of the listing arrangements, no relevant securities in the company or depositary receipts for relevant securities in the company are listed on the recognised stock exchange to which the listing arrangements relate.

(4) An instrument is not prevented from being an exempt listing instrument by reason only of a delay in transferring relevant securities where—

(a) a person (“ the transferor ”) acquires the relevant securities before qualifying listing arrangements are entered into,

(b) the transferor is subject to a restriction that has the effect of preventing the transfer of the relevant securities in the course of the qualifying listing arrangements, and

(c) the instrument transfers the relevant securities as soon as reasonably practicable after the time at which the restriction ceases to have effect.

(5) Section 1005 of the Income Tax Act 2007 (meaning of “ recognised stock exchange ”, “ listed ” etc) applies in relation to this section as it applies in relation to the Income Tax Acts.

Section 74 Reconstructions etc: repeals.

(1) The following provisions shall cease to have effect—

(a) section 55 of the Finance Act 1927 and section 4 of the Finance Act (Northern Ireland) 1928 (reconstructions and amalgamations);

(b) paragraph 12(1) and (1A) of Schedule 18 to the Finance Act 1980 (demergers);

(c) sections 78, 79 and 80 of the Finance Act 1985 (takeovers and winding-up).

(2) In paragraph 12(3) of Schedule 18 to the Finance Act 1980 for the words “sub-paragraph (2) above” there shall be substituted the words “this paragraph”.

(3) This section applies to any instrument executed in pursuance of a contract made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

Section 75 Acquisitions: reliefs.

(1) This section applies where a company (the acquiring company) acquires the whole or part of an undertaking of another company (the target company) in pursuance of a scheme for the reconstruction of the target company.

(2) If the first and second conditions (as defined below) are fulfilled, stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) shall not be chargeable on an instrument executed for the purposes of or in connection with the transfer of the undertaking or part.

(3) An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for that subsection or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.

(4) The first condition is ... that the consideration for the acquisition—

(a) consists of or includes the issue of non-redeemable shares in the acquiring company to all the shareholders of the target company;

(b) includes nothing else (if anything) but the assumption or discharge by the acquiring company of liabilities of the target company.

In paragraph (a) above, “ non-redeemable shares ” means shares which are not redeemable shares.

(5) The second condition is that—

(a) the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, income tax, corporation tax or capital gains tax,

(b) after the acquisition has been made, each shareholder of each of the companies is a shareholder of the other, and

(c) after the acquisition has been made, the proportion of shares of one of the companies held by any shareholder is the same , or as nearly as may be the same, as the proportion of shares of the other company held by that shareholder.

(5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsections (4) and (5) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

(6) This section applies to any instrument which is executed after 24th March 1986 unless it is executed in pursuance of an unconditional contract made on or before 18th March 1986.

(7) This section shall be deemed to have come into force on 25th March 1986.

Section 76 Acquisitions: further provisions about reliefs.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 77 Acquisition of target company's share capital

(1) Stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) shall not be chargeable on an instrument transferring shares in one company (the target company) to another company (the acquiring company) if the conditions mentioned in subsection (3) below are fulfilled.

(2) An instrument on which stamp duty is not chargeable by virtue only of subsection (1) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for that subsection or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.

(3) The conditions are that —

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the transfer forms part of an arrangement by which the acquiring company acquires the whole of the issued share capital of the target company,

(c) the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, stamp duty reserve tax, income tax, corporation tax or capital gains tax,

(d) the consideration for the acquisition consists only of the issue of shares in the acquiring company to the shareholders of the target company,

(e) after the acquisition has been made, each person who immediately before it was made was a shareholder of the target company is a shareholder of the acquiring company,

(f) after the acquisition has been made, the shares in the acquiring company are of the same classes as were the shares in the target company immediately before the acquisition was made,

(g) after the acquisition has been made, the number of shares of any particular class in the acquiring company bears to all the shares in that company the same proportion , or as nearly as may be the same proportion, as the number of shares of that class in the target company bore to all the shares in that company immediately before the acquisition was made, ...

(h) after the acquisition has been made, the proportion of shares of any particular class in the acquiring company held by any particular shareholder is the same , or as nearly as may be the same, as the proportion of shares of that class in the target company held by him immediately before the acquisition was made , and

(i) at the time the instrument mentioned in subsection (1) is executed there are no disqualifying arrangements, within the meaning given by section 77A, in existence.

(3A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of subsection (3)(b) to (h) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

(4) In this section and section 77A references to shares and to share capital include references to stock.

(5) This section applies to any instrument executed on or after 1st August 1986.

Section 77A Disqualifying arrangements

(1) This section applies for the purposes of section 77(3)(i).

(2) Arrangements are “disqualifying arrangements” if it is reasonable to assume that the purpose, or one of the purposes, of the arrangements is to secure that—

(a) a particular person obtains control of the acquiring company, or

(b) particular persons together obtain control of that company.

but a person who has held at least 25% of the issued share capital of the target company at all times during the relevant period is not within paragraph (a) or (b).

(2A) For the purposes of subsection (2) the “relevant period” is the period of 3 years ending immediately before the time at which the shares in the acquiring company are issued (or first issued) as consideration for the acquisition.

(3) ... neither of the following are disqualifying arrangements—

(a) the arrangements for the issue of shares in the acquiring company which is the consideration for the acquisition mentioned in section 77(3);

(b) any relevant merger arrangements.

(4) In subsection (3) “ relevant merger arrangements ” means arrangements for the issue of shares in the acquiring company to the shareholders of a company (“company B”) other than the target company (“company A”) in a case where—

(a) that issue of shares to the shareholders of company B would be the only consideration for the acquisition by the acquiring company of the whole of the issued share capital of company B,

(b) the conditions in section 77(3)(c) and (e) would be met in relation to that acquisition (if that acquisition were made in accordance with the arrangements), and

(c) the conditions in paragraphs (f) to (h) of section 77(3) would be met in relation to that acquisition if—

(i) that acquisition were made in accordance with the arrangements, and

(ii) the shares in the acquiring company issued as consideration for the acquisition of the share capital of company A were ignored for the purposes of those paragraphs;

and in section 77(3)(e) to (h) and (3A) as they apply by virtue of this subsection, references to the target company are to be read as references to company B.

(5) Where—

(a) arrangements within any paragraph of subsection (3) are part of a wider scheme or arrangement, and

(b) that scheme or arrangement includes other arrangements which—

(i) fall within subsection (2), and

(ii) do not fall within any paragraph of subsection (3),

those other arrangements are disqualifying arrangements despite anything in subsection (3).

(5A) The Treasury may by regulations amend subsection (2) or (2A) so as to alter the percentage or length of the period for the time being specified there.

(5B) The power to make regulations under subsection (5A) is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

(6) In this section—

“ the acquiring company ” has the meaning given by section 77(1);

“ arrangements ” includes any agreement, understanding or scheme (whether or not legally enforceable);

“ control ” is to be read in accordance with section 1124 of the Corporation Tax Act 2010;

“ the target company ” has the meaning given by section 77(1).

Section 78 Loan capital.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In this section “ loan capital ” means—

(a) any debenture stock, corporation stock or funded debt, by whatever name known, issued by a body corporate or other body of persons (which here includes a local authority and any body whether formed or established in the United Kingdom or elsewhere);

(b) any capital raised by such a body if the capital is borrowed or has the character of borrowed money, and whether it is in the form of stock or any other form;

(c) stock or marketable securities issued by the government of any country or territory outside the United Kingdom;

(d) any capital raised under arrangements to which section 564G of the Income Tax Act 2007 or section 507 of the Corporation Tax Act 2009 (alternative finance investment bonds) applies .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) In this section “ designated international organisation ” means an international organisation designated for the purposes of section 324 of the Taxes Act 1988 by an order made under subsection (1) of that section.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 79 Loan capital: new provisions.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Stamp duty under Schedule 15 to the Finance Act 1999 (bearer instruments) shall not be chargeable ... on the transfer of the loan capital constituted by, or transferable by means of, an instrument which relates to loan capital .

(3) Stamp duty shall not be chargeable on an instrument which transfers loan capital issued or raised by —

(a) the financial support fund of the Organisation for Economic Co-operation and Development,

(b) the Inter-American Development Bank, or

(c) an organisation which was a designated international organisation at the time of the transfer (whether or not it was such an organisation at the time the loan capital was issued or raised).

(4) Subject to subsections (5) and (6) below, stamp duty shall not be chargeable on an instrument which transfers any other loan capital.

(5) Subsection (4) above does not apply to an instrument transferring loan capital which, at the time the instrument is executed, carries a right (exercisable then or later) of conversion into shares or other securities, or to the acquisition of shares or other securities, including loan capital of the same description.

(6) Subject to subsections (7) to (7B) below, subsection (4) above does not apply to an instrument transferring loan capital which, at the time the instrument is executed or any earlier time, carries or has carried —

(a) a right to interest the amount of which exceeds a reasonable commercial return on the nominal amount of the capital,

(b) a right to interest the amount of which falls or has fallen to be determined to any extent by reference to the results of, or of any part of, a business or to the value of any property, or

(c) a right on repayment to an amount which exceeds the nominal amount of the capital and is not reasonably comparable with what is generally repayable (in respect of a similar nominal amount of capital) under the terms of issue of loan capital listed in the Official List of The Stock Exchange.

(7) Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(a) or (c) above by reason only that the loan capital concerned carries a right to interest, or (as the case may be) to an amount payable on repayment, determined to any extent by reference to an index showing changes in the general level of prices payable in the United Kingdom over a period substantially corresponding to the period between the issue or raising of the loan capital and its repayment.

(7A) Subsection (4) above shall not be prevented from applying to an instrument by virtue of subsection (6)(b) above by reason only that the loan capital concerned carries a right to interest which—

(a) reduces in the event of the results of a business or part of a business improving, or the value of any property increasing, or

(b) increases in the event of the results of a business or part of a business deteriorating, or the value of any property diminishing.

(7B) Subsection (4) shall not be prevented from applying to a capital market instrument by virtue of subsection (6)(b) by reason only that the capital market investment concerned carries or has carried a right to interest which ceases or reduces if, or to the extent that, the issuer, after meeting or providing for other obligations specified in the capital market arrangement concerned, has insufficient funds available from that capital market arrangement to pay all or part of the interest otherwise due.

(8) Where stamp duty is chargeable under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) on an instrument which transfers loan capital, the rate at which duty is charged under that Part shall be 0.5% of the amount or value of the consideration for the sale to which the instrument gives effect.

(8A) In the application of this section to loan capital that falls within paragraph (d) of section 78(7) (alternative finance investment bonds)—

(a) subsection (6) has effect as if—

(i) paragraph (a) were omitted, and

(ii) for paragraph (c) there were substituted—

(c) a right at the end of the bond term (within the meaning of section 564G(1) of the Income Tax Act 2007 or section 507(1) of the Corporation Tax Act 2009 ) to a payment of an amount that exceeds the aggregate of—

(i) the amount paid for the issue of the bond, and

(ii) the notional payment amount;

and for this purpose the “ notional payment amount ” means the amount of the payments that would represent a reasonable commercial return (within the meaning of section 564G(1) of the Income Tax Act 2007 or section 507(1) of the Corporation Tax Act 2009 ) on the bond over the bond term, less the amount of the payments actually made.

(b) subsections (6)(b), (7), (7A), (7B) and (13) have effect as if references to interest were references to additional payments (“additional payments” having the same meaning as in section 564G of the Income Tax Act 2007 or section 507 of the Corporation Tax Act 2009 ), and

(c) subsections (7B) and (13) also have effect as if—

(i) references to a capital market investment were references to the loan capital falling within paragraph (d) of section 78(7), and

(ii) references to a capital market arrangement were to the arrangements under which that loan capital is raised.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) Subsections (7), (9) . . . of section 78 above shall apply as if references to that section included references to this.

(13) In this section—

“ capital market instrument ” means an instrument transferring a capital market investment issued as part of a capital market arrangement, and

“ capital market investment ” and “ capital market arrangement ” have the same meaning as in section 72B of the Insolvency Act 1986 (see paragraphs 1 to 3 of Schedule 2A to that Act).

Section 80A Sales to intermediaries.

(1) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a regulated market on which stock of that kind is regularly traded; and

(b) the person is an intermediary and is recognised as such by the market in accordance with arrangements approved by the Commissioners.

(1A) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a multilateral trading facility, or a recognised foreign exchange, on which stock of that kind is regularly traded;

(b) the person is an intermediary and is recognised as such by the facility or exchange in accordance with arrangements approved by the Commissioners; and

(c) the sale is effected on the facility or exchange.

(1B) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an intermediary who is approved for the purposes of this section by the Commissioners; and

(b) stock of that kind is regularly traded on a regulated market.

(1C) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an intermediary who is approved for the purposes of this section by the Commissioners;

(b) stock of that kind is regularly traded on a multilateral trading facility or a recognised foreign exchange; and

(c) the sale is effected on the facility or exchange.

(2) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;

(c) the person is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and

(d) stock of that kind is regularly traded on a regulated market.

(2A) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;

(c) the person is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and

(d) the sale is effected on a relevant qualifying exchange on which stock of that kind is regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that exchange;

and in paragraph (d) “ relevant qualifying exchange ” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.

(2B) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an options intermediary who is approved for the purposes of this section by the Commissioners;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and

(c) stock of that kind is regularly traded on a regulated market.

(2C) Stamp duty shall not be chargeable on an instrument transferring stock of a particular kind on sale to a person or the person's nominee if—

(a) the person is an options intermediary who is approved for the purposes of this section by the Commissioners;

(b) options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and

(c) the sale is effected on a relevant qualifying exchange on which stock of that kind is regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell stock of that kind are regularly traded on, and are listed by or quoted on, that exchange;

and in paragraph (c) “ relevant qualifying exchange ” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.

(4) For the purposes of this section—

(a) an intermediary is a person who carries on a bona fide business of dealing in stock and does not carry on an excluded business; and

(b) an options intermediary is a person who carries on a bona fide business of dealing in quoted or listed options to buy or sell stock and does not carry on an excluded business.

(5) The excluded businesses are the following—

(a) any business which consists wholly or mainly in the making or managing of investments;

(b) any business which consists wholly or mainly in, or is carried on wholly or mainly for the purpose of, providing services to persons who are connected with the person carrying on the business;

(c) any business which consists in insurance business;

(d) any business which consists in managing or acting as trustee in relation to a pension scheme or which is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme;

(e) any business which consists in operating or acting as trustee in relation to a collective investment scheme or is carried on by the operator or trustee of such a scheme in connection with or for the purposes of the scheme.

(6) A sale is effected on a facility or an exchange for the purposes of this section if (and only if)—

(a) it is subject to the rules of the facility or exchange ; and

(b) it is reported to the facility or exchange in accordance with the rules of the facility or exchange .

(6A) The Commissioners may approve a person for the purposes of this section only if the person

(a) is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account), whether or not the person is authorised under the Directive or

(b) has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

(7) An instrument on which stamp duty is not chargeable by virtue only of this section shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.

Section 80B Intermediaries: supplementary.

(1) For the purposes of section 80A above the question whether a person is connected with another shall be determined in accordance with the provisions of section 1122 of the Corporation Tax Act 2010 .

(2) In section 80A above and this section—

“ collective investment scheme ” has the meaning given in section 75 of the Financial Services Act 1986;

“ the Directive ” means Directive 2004/39/ EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, as amended from time to time;

...

“ EEA State ” , in relation to any time, means a State which at that time is a member State or any other State which at that time is a contracting party to the agreement on the European Economic Area signed at Oporto on the 2nd May 1992 as adjusted by the Protocol signed at Brussels on the 17th March 1993 (as modified or supplemented from time to time) ;

“ insurance business ” means long term business or general business as defined in section 1 of the Insurance Companies Act 1982;

“multilateral trading facility” means—

a UK multilateral trading facility, within the meaning of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments;

an EU multilateral trading facility, within the meaning of that Regulation; or

a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments (in the system and in accordance with non-discretionary rules) in a way which results in a contract in accordance with Part 2 of the Financial Services (Markets in Financial Instruments) Act 2018 of Gibraltar,

a Gibraltar multilateral trading facility within the meaning given by Article 26(11)(b)(ii) of that Regulation;

...

“ quoted or listed options ” means options which are quoted on or listed by a multilateral trading facility, a regulated market or a recognised foreign options exchange;

“regulated market” means—

a UK regulated market, within the meaning of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments;

an EU regulated market, within the meaning of that Regulation; or

a regulated market, within the meaning of that Regulation, which is authorised and functions regularly and in accordance with Part 3 of the Financial Services (Markets in Financial Instruments) Act 2018 of Gibraltar;

a Gibraltar regulated market within the meaning given by Article 26(11)(b)(i) of that Regulation;

“ stock ” includes any marketable security;

“ trustee ” and “ the operator ” shall, in relation to a collective investment scheme, be construed in accordance with section 75(8) of the Financial Services Act 1986.

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In section 80A above “ recognised foreign exchange ” means a market which—

(a) is not in the United Kingdom, Gibraltar or an EEA State; and

(b) is specified in regulations made by the Treasury under this subsection.

(4) In section 80A above and this section “ recognised foreign options exchange ” means a market which—

(a) is not in the United Kingdom, Gibraltar or an EEA State; and

(b) is specified in regulations made by the Treasury under this subsection.

(5) In section 80A above “ the exercise of a relevant option ” means—

(a) the exercise by the options intermediary concerned of an option to buy stock; or

(b) the exercise of an option binding the options intermediary concerned to buy stock.

(5A) The Treasury may by regulations amend section 80A above and this section (as they have effect for the time being) in order to extend the exemption from duty under that section.

(6) The Treasury may by regulations provide that section 80A above shall not have effect in relation to instruments executed in pursuance of kinds of agreement specified in the regulations.

(7) The Treasury may by regulations provide that if—

(a) an instrument falls within any of subsections (1) to (2C) of section 80A above, and

(b) stamp duty would be chargeable on the instrument apart from that section,

stamp duty shall be chargeable on the instrument at a rate, specified in the regulations, which shall not exceed 10p for every £100 or part of £100 of the consideration for the sale.

(8) The Treasury may by regulations change the meaning of “ intermediary ” or “ options intermediary ” for the purposes of section 80A above by amending subsection (4) or (5) of that section (as it has effect for the time being).

(9) The power to make regulations under subsections (3) to (8) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 80C Repurchases and stock lending.

(1) This section applies where a person (A) has entered into an arrangement with another person (B) under which—

(a) B is to transfer stock of a particular kind to A or his nominee, and

(b) stock of the same kind and amount is to be transferred by A or his nominee to B or his nominee,

and the conditions set out in subsection (2A) or (3) below are fulfilled.

(2) Stamp duty shall not be chargeable on an instrument transferring stock to B or his nominee or A or his nominee in accordance with the arrangement.

(2A) The conditions in this subsection are—

(a) that A or B

(i) is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account) in relation to stock of the kind concerned, whether or not A or B is authorised under the Directive; or

(ii) has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

(b) that stock of the kind concerned is regularly traded on a regulated market.

(3) The conditions in this subsection are—

(a) that the arrangement is effected on a regulated market, a multilateral trading facility or a recognised foreign exchange; and

(b) that stock of the kind concerned is regularly traded on that market, facility or exchange.

(4) An arrangement does not fall within subsection (1) above if—

(a) the arrangement is not such as would be entered into by persons dealing with each other at arm’s length; or

(b) under the arrangement any of the benefits or risks arising from fluctuations, before the transfer to B or his nominee takes place, in the market value of the stock accrues to, or falls on, A.

(5) An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty; and notwithstanding anything in section 122(1) of the Stamp Act 1891, the stamp may be a stamp of such kind as the Commissioners may prescribe.

(6) An arrangement is effected on a market, a facility or an exchange for the purposes of subsection (3) above if (and only if)—

(a) it is subject to the rules of the market, facility or exchange ; and

(b) it is reported to the market, facility or exchange in accordance with the rules of the market, facility or exchange .

(7) In this section—

“ the Directive ” has the meaning given in section 80B(2) above;

“ EEA State ” has the meaning given in section 80B(2) above;

...

“multilateral trading facility” has the meaning given in section 80B(2);

“ recognised foreign exchange ” has the meaning given in section 80B(3) above.

“regulated market” has the meaning given in section 80B(2).

(7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) The Treasury may by regulations provide that if stamp duty would be chargeable on an instrument but for subsection (2) above, stamp duty shall be chargeable on the instrument at a rate, specified in the regulations, which shall not exceed 10p for every £100 or part of £100 of the consideration for the transfer.

(9) The Treasury may by regulations amend this section (as it has effect for the time being) in order—

(a) to change the conditions for exemption from duty under this section; or

(b) to provide that this section does not apply in relation to kinds of arrangement specified in the regulations.

(10) The power to make regulations under subsection (8) or (9) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 80D Repurchases and stock lending: replacement stock on insolvency

(1) This section applies where—

(a) A and B have entered into an arrangement falling within section 80C(1),

(b) the conditions in subsection (2A) or (3) of that section are met,

(c) stock is transferred to A or A's nominee, and

(d) the conditions in subsection (2) below are met.

(2) The conditions in this subsection are that—

(a) A and B are not connected persons within the meaning of section 1122 of the Corporation Tax Act 2010 ,

(b) after B has transferred stock under the arrangement, A or B becomes insolvent,

(c) it becomes apparent (whether before or after the insolvency occurs) that, as a result of the insolvency, stock will not be transferred to B or B's nominee in accordance with the arrangement,

(d) the party who does not become insolvent (“the solvent party”) or the solvent party's nominee acquires replacement stock, and

(e) the replacement stock is acquired before the end of the period of 30 days beginning with the day on which the insolvency occurs (“the insolvency date”).

(3) Where collateral is provided under the arrangement (or under arrangements of which that arrangement forms part), stamp duty is not chargeable on any instrument transferring to the solvent party or the solvent party's nominee—

(a) replacement stock acquired using the collateral (whether directly or indirectly), or

(b) where the solvent party uses the whole of the value of the collateral to acquire replacement stock, any further replacement stock.

(4) Where no collateral is provided as mentioned in subsection (3), stamp duty is not chargeable on any instrument transferring replacement stock to the solvent party or the solvent party's nominee.

(5) Subsections (3) and (4) may apply as regards more than one instrument (and where those subsections apply as regards more than one instrument, the instruments may be executed by different persons).

(6) But those subsections apply only as regards replacement stock up to the amount of stock which will not be transferred as a result of the insolvency.

(7) An instrument on which stamp duty is not chargeable by virtue only of subsection (3) or (4) is not to be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty.

(8) Despite section 122(1) of the Stamp Act 1891, the stamp mentioned in subsection (7) may be a stamp of such kind as the Commissioners for Her Majesty's Revenue and Customs may prescribe.

(9) For the purposes of this section a person becomes insolvent—

(a) if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,

(b) if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,

(c) on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,

(d) if an individual voluntary arrangement takes effect under Part 8 of that Act,

(e) on the making of a bankruptcy application or presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),

(f) if a compromise or arrangement takes effect under Part 26 or 26A of the Companies Act 2006,

(g) if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,

(h) if a bank administration order takes effect under Part 3 of that Act, ...

(ha) if a special administration order takes effect under the Investment Bank Special Administration Regulations 2011, ...

(hb) if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or

(i) on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.

(10) In this section—

“ collateral ” means an amount of money or other property which is payable to, or made available for the benefit of, a party to an arrangement or that party's nominee for the purpose of securing the discharge of the requirement to transfer stock to that party or the nominee;

“replacement stock”, in the event of a party to an arrangement becoming insolvent, is stock of the same kind as the stock which will not be transferred to the other party or that party's nominee as a result of the insolvency.

Section 84 Miscellaneous exemptions

(1) In section 127(1) of the Finance Act 1976 (no stamp duty on transfer to stock exchange nominee executed for purposes of a stock exchange transaction) the words “ which is executed for the purposes of a stock exchange transaction ” shall be omitted.

(2) Stamp duty shall not be chargeable on an instrument effecting a transfer of stock if —

(a) the transferee is a recognised investment exchange or a nominee of a recognised investment exchange, and

(b) an agreement which relates to the stamp duty which would (apart from this subsection) be chargeable on the instrument, and was made between the Commissioners and the investment exchange under section 33 of the Finance Act 1970, is in force at the time of the transfer.

(3) Stamp duty shall not be chargeable on an instrument effecting a transfer of stock if —

(a) the transferee is a recognised clearing house , a recognised CSD ... or a third country CSD or a nominee of a recognised clearing house , a recognised CSD ... or a third country CSD , and

(b) an agreement which relates to the stamp duty which would (apart from this subsection) be chargeable on the instrument, and was made between the Commissioners and the clearing house under section 33 of the Finance Act 1970 , is in force at the time of the transfer.

(4) Subsection (1) above applies to any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.

(5) Subsection (2) above applies to any instrument giving effect to a transaction carried out on or after such day as the Commissioners may appoint by order made by statutory instrument.

(6) Subsection (3) above applies to any instrument giving effect to a transaction carried out on or after such day as the Commissioners may appoint by order made by statutory instrument.

Section 85 Supplementary

(1) Section 42(1) of the Finance Act 1920 (reduction of duty in case of certain transfers to jobbers or nominees or qualified dealers) shall have effect, in the case of any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms as if the following were omitted —

(a) in that subsection, the words “ a jobber or his nominee or to”and in the proviso to it the words “jobber or”(in each place);

(b) in subsection (3) of that section, paragraph (d) of the definition of “ qualified dealer ”(Stock Exchange brokers).

(2) Section 34 of the Finance Act 1961 and section 4 of the Finance Act (Northern Ireland) 1961 (borrowing of stock by jobbers) shall not apply where stock is transferred in discharge of an undertaking given on or after the day of The Stock Exchange reforms.

(3) Section 42(1) of the Finance Act 1920 shall not apply to any transfer giving effect to a transaction carried out on or after such day as is specified for this purpose in regulations made under section 81(5) above; and different days may be so specified for different purposes.

(4) Section 127(2) of the Finance Act 1976 (transfer otherwise than on sale from stock exchange nominee to jobber) shall not apply to any transfer giving effect to a transaction carried out on or after the day of The Stock Exchange reforms.

(5) In sections 81, 82 and 84 above and this section—

(a) “ the day of The Stock Exchange reforms ” means the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished,

(b) references to a recognised investment exchange are to a recognised investment exchange within the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000 ,

(c) “recognised clearing house”, “recognised CSD”, ... and “third country CSD” have the meanings given by section 285(1)(b), (e) ... and (g) of the Financial Services and Markets Act 2000 ,

(d) “ stock ” includes marketable security.

Section 85A Resolution of financial institutions

(1) Stamp duty is not chargeable on the transfer of stock or marketable securities by—

(a) an instrument listed in subsection (2), or

(b) an instrument made under an instrument listed in subsection (2).

(2) The instruments are—

(a) a mandatory reduction instrument made in accordance with section 6B of the Banking Act 2009 (mandatory write-down, conversion etc of capital instruments),

(b) a share transfer instrument or property transfer instrument made in accordance with section 12(2) of that Act (transfer to a bridge bank),

(c) a property transfer instrument made in accordance with section 12ZA(3) of that Act (transfer to asset management vehicle),

(d) a resolution instrument made in accordance with section 12A of that Act (bail-in),

(e) a share transfer order or share transfer instrument made in accordance with section 13(2) of that Act (share transfer),

(f) a supplemental share transfer instrument made in accordance with section 26 of that Act, where the original instrument was made in accordance with section 12(2) or 13(2) of that Act,

(g) a supplemental share transfer order made in accordance with section 27 of that Act,

(h) a property transfer instrument made in accordance with section 41A(2) of that Act (transfer of property subsequent to resolution instrument),

(i) a supplemental property transfer instrument made in accordance with section 42(2) of that Act where the original instrument was made in accordance with section 12(2), 12ZA(3) or 41A(2) of that Act,

(j) a bridge bank supplemental property transfer instrument made in accordance with section 44D(2) of that Act,

(k) a property transfer order made in accordance with section 45(2) of that Act,

(l) a supplemental resolution instrument made in accordance with section 48U(2) of that Act,

(m) an onward transfer resolution instrument made in accordance with section 48V of that Act in the circumstances set out in subsection (3),

(n) an order under section 85 of that Act (temporary public ownership: building societies), ...

(o) a third-country instrument made in accordance with section 89H(2) or 89I(4) of that Act.

(p) a share transfer instrument or property transfer instrument made in accordance with paragraph 29(3) (bridge central counterparty) of Schedule 11 to the Financial Services and Markets Act 2023 (central counterparties),

(q) a share transfer instrument made in accordance with paragraph 30(2) of that Schedule (transfer of ownership),

(r) a write-down instrument made in accordance with paragraph 34(2) of that Schedule (write-down power),

(s) a supplemental share transfer instrument made in accordance with paragraph 49 of that Schedule (supplemental instruments), where the original instrument was made in accordance with paragraph 29(3) or 30(2) of that Schedule,

(t) a property transfer instrument made in accordance with paragraph 66(2) of that Schedule (transfer of property subsequent to resolution instrument),

(u) a supplemental property transfer instrument made in accordance with paragraph 67(2) of that Schedule (supplemental instruments) where the original instrument was made in accordance with paragraph 29(3) of that Schedule,

(v) a bridge central counterparty supplemental property transfer instrument made in accordance with paragraph 73(2) of that Schedule (bridge central counterparty: supplemental property transfer powers),

(w) a supplemental resolution instrument made in accordance with paragraph 82(2) of that Schedule (supplemental resolution instruments), or

(x) a third-country instrument made in accordance with paragraph 145(2) (third-country resolution actions) or 146(4) (effects of recognition on third-country resolution action) of that Schedule.

(3) The circumstances referred to in subsection (2)(m) are that the transfer—

(a) is to a person within section 67(6), (7) or (8) or section 70(6), (7) or (8) of this Act (depositary receipt issuers, clearance services), and

(b) is made by way of compensation to a creditor of the financial institution in respect of which the original instrument (within the meaning of section 48V of the Banking Act 2009) was made.

(4) References in this section to a provision of the Banking Act 2009 include references to that provision as applied by or under any other provision of that Act (including where it is applied with modifications or in a substituted form).

Section 86 The tax: introduction

(1) A tax, to be known as stamp duty reserve tax, shall be charged in accordance with this Part of this Act.

(2) The tax shall be under the care and management of the Board.

(3) Section 1 of the Provisional Collection of Taxes Act 1968 shall apply to the tax; and accordingly in subsection (1) of that section after the words “petroleum revenue tax” there shall be inserted the words “ stamp duty reserve tax ” .

(4) Stamp duty reserve tax shall be chargeable in accordance with the provisions of this Part of this Act—

(a) whether the agreement, transfer, issue or appropriation in question is made or effected in the United Kingdom or elsewhere, and

(b) whether or not any party is resident or situate in any part of the United Kingdom.

Section 87 The principal charge

(1) This section applies where a person (A) agrees with another person (B) to transfer chargeable securities (whether or not to B) for consideration in money or money's worth.

(2) There shall be a charge to stamp duty reserve tax under this section on . . . the relevant day, . . .

(3) In subsection (2) above “ the relevant day ” means —

(a) in a case where the agreement is conditional, the day on which the condition is satisfied, and

(b) in any other case, the day on which the agreement is made.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Tax under this section shall be charged at the rate of 0.5 per cent. or part of £100 of the amount or value of the consideration mentioned in subsection (1) above.

(7) For the purposes of subsection (6) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the agreement mentioned in subsection (1) above is made.

(7A) Where—

(a) there would be no charge to tax under this section, or

(b) there would, under section 92 below, be a repayment or cancellation of tax,

in relation to some of the chargeable securities to which the agreement between A and B relates if separate agreements had been made between them for the transfer of those securities and for the transfer of the remainder, this section and sections 88(5) and 92 below shall have effect as if such separate agreements had been made.

(7B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) This section applies where the agreement to transfer is made on or after the day on which the rule of The Stock Exchange that prohibits a person from carrying on business as both a broker and a jobber is abolished.

(10) This section has effect subject to sections 88 to 90 below.

Section 88 Special cases.

(1) An instrument on which stamp duty is not chargeable by virtue of —

(aa) paragraph 24(d) of Schedule 13 to the Finance Act 1999 (renounceable letters of allotment etc.),

(a) section 127(1) of the Finance Act 1976 (transfer to stock exchange nominee), or

(b) section 84(2) or (3) above, , or

(c) Part I of Schedule 19 to the Finance Act 1999 (transfers etc. of units in unit trusts),

shall be disregarded in construing section 92(1A) and (1B) below .

(1A) An instrument on which stamp duty is not chargeable by virtue of section 186 of the Finance Act 1996 (transfers of securities to members of electronic transfer systems etc) shall be disregarded in construing section 92(1A) and (1B) below unless—

(a) the transfer is made by a stock exchange nominee; and

(b) the maximum stamp duty chargeable on the instrument, apart from section 186 of the Finance Act 1996, would be £5 ;

and in this subsection “ stock exchange nominee ” means a person designated for the purposes of section 127 of the Finance Act 1976 as a nominee of The Stock Exchange by an order made by the Secretary of State under subsection (5) of that section.

(1B) An instrument on which stamp duty is not chargeable by virtue of section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954 (transfer between associated bodies corporate) shall be disregarded in construing section 92(1A) and (1B) below in any case where—

(a) the property mentioned in section 42(2)(a) of the Finance Act 1930 or, as the case may be, section 11(2)(a) of the Finance Act (Northern Ireland) 1954 consists of or includes chargeable securities of any particular kind acquired in the period of two years ending with the day on which the instrument was executed; and

(b) the body corporate from which the conveyance or transfer there mentioned is effected acquired any of those chargeable securities —

(i) in a transaction which was given effect by an instrument of transfer on which stamp duty was not chargeable by virtue of section 80A above;

(ii) in pursuance of an agreement to transfer securities as regards which section 87 above did not apply by virtue of section 88A below; . . .

(iia) in pursuance of an agreement to transfer securities which was made for the purpose of performing the obligation to transfer chargeable securities described in section 89AA(1)(a) below and as regards which section 87 above did not apply by virtue of section 89AA(2) below; or

(iii) in circumstances with regard to which the charge to stamp duty or stamp duty reserve tax was treated as not arising by virtue of regulations under section 116 or 117 of the Finance Act 1991.

(1C) Where—

(a) there is an arrangement falling within subsection (1) of section 80C above (stamp duty relief for transfers in accordance with certain arrangements for B to transfer stock to A or his nominee and for A or his nominee to transfer stock of the same kind and amount back to B or his nominee), and

(b) under the arrangement stock is transferred to A or his nominee by an instrument on which stamp duty is not chargeable by virtue only of section 80C(2) above, but

(c) it becomes apparent that stock of the same kind or amount will not be transferred to B or his nominee by A or his nominee in accordance with the arrangement,

then, if section 80D does not apply, the instrument shall be disregarded in construing section 92(1A) and (1B) below.

(1D) Where—

(a) an instrument transferring stock in accordance with an arrangement is stamped under section 80C(5) above, but

(b) the instrument should not have been so stamped because the arrangement fell within section 80C(4)(a) or (b) above, and

(c) apart from section 80C above stamp duty would have been chargeable on the instrument,

the instrument shall be deemed to be duly stamped under section 80C(5) above, but shall be disregarded in construing section 92(1A) and (1B) below.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) If chargeable securities cannot (apart from this subsection) be identified for the purposes of subsection (1B) above, securities shall be taken as follows, that is to say, securities of the same kind acquired later in the period of two years there mentioned (and not taken for the purposes of that subsection in relation to an earlier instrument) shall be taken before securities acquired earlier in that period.

(5) If, in the case of an agreement (or of two or more agreements between the same parties) to transfer chargeable securities—

(a) the conditions in section 92(1A) and (1B) below are not satisfied by virtue only of the application of subsection (1B) above in relation to the instrument (or any one or more of the two or more instruments) in question, but

(b) not all of the chargeable securities falling to be regarded for the purposes of that subsection as transferred by the instrument (or by the two or more instruments between them) were acquired as mentioned in paragraphs (a) and (b) of that subsection,

stamp duty reserve tax shall be repaid or cancelled under section 92 below in accordance with subsection (5A) below.

(5A) Any repayment or cancellation of tax falling to be made by virtue of subsection (5) above shall be determined as if (without prejudice to section 87(7A) above) there had, instead of the agreement (or the two or more agreements) in question been—

(a) a separate agreement (or two or more separate agreements) relating to such of the securities as were acquired as mentioned in paragraphs (a) and (b) of subsection (1B) above, and

(b) a single separate agreement relating to such of the securities as do not fall within those paragraphs,

and as if the instrument in question (or the two or more instruments in question between them) had related only to such of the securities as do not fall within those paragraphs.

(6) Where a person enters into an agreement for securities to be transferred to him or his nominee, the securities shall be treated for the purposes of subsections (1B)(a) and (4) above as acquired by that person at the time when he enters into the agreement, unless the agreement is conditional, in which case they shall be taken to be acquired by him when the condition is satisfied.

Section 88A Section 87: exceptions for intermediaries.

(1) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is a member of a regulated market on which securities of that kind are regularly traded; and

(b) B is an intermediary and is recognised as such by the market in accordance with arrangements approved by the Commissioners for Her Majesty's Revenue and Customs (“ the Commissioners ”).

(1A) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is a member of a multilateral trading facility, or a recognised foreign exchange, on which securities of that kind are regularly traded;

(b) B is an intermediary and is recognised as such by the facility or exchange in accordance with arrangements approved by the Commissioners; and

(c) the agreement is effected on the facility or exchange.

(1B) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is an intermediary who is approved for the purposes of this section by the Commissioners; and

(b) securities of that kind are regularly traded on a regulated market.

(1C) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is an intermediary who is approved for the purposes of this section by the Commissioners;

(b) securities of that kind are regularly traded on a multilateral trading facility or a recognised foreign exchange; and

(c) the agreement is effected on the facility or exchange.

(2) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;

(b) options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;

(c) B is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and

(d) securities of that kind are regularly traded on a regulated market.

(2A) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is a member of a regulated market, a multilateral trading facility or a recognised foreign options exchange;

(b) options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that market, facility or exchange;

(c) B is an options intermediary and is recognised as such by that market, facility or exchange in accordance with arrangements approved by the Commissioners; and

(d) the agreement is effected on a relevant qualifying exchange on which securities of that kind are regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that exchange;

and in paragraph (d) “ relevant qualifying exchange ” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.

(2B) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is an options intermediary who is approved for the purposes of this section by the Commissioners;

(b) options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and

(c) securities of that kind are regularly traded on a regulated market.

(2C) Section 87 above shall not apply as regards an agreement to transfer securities of a particular kind to B or B's nominee if—

(a) B is an options intermediary who is approved for the purposes of this section by the Commissioners;

(b) options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, a regulated market, a multilateral trading facility or a recognised foreign options exchange; and

(c) the agreement is effected on a relevant qualifying exchange on which securities of that kind are regularly traded or is effected on a relevant qualifying exchange pursuant to the exercise of a relevant option and options to buy or sell securities of that kind are regularly traded on, and are listed by or quoted on, that exchange;

and in paragraph (c) “ relevant qualifying exchange ” means a multilateral trading facility, a recognised foreign options exchange or a recognised foreign exchange.

(4) For the purposes of this section—

(a) an intermediary is a person who carries on a bona fide business of dealing in chargeable securities and does not carry on an excluded business; and

(b) an options intermediary is a person who carries on a bona fide business of dealing in quoted or listed options to buy or sell chargeable securities and does not carry on an excluded business.

(5) The excluded businesses are the following—

(a) any business which consists wholly or mainly in the making or managing of investments;

(b) any business which consists wholly or mainly in, or is carried on wholly or mainly for the purpose of, providing services to persons who are connected with the person carrying on the business;

(c) any business which consists in insurance business;

(d) any business which consists in managing or acting as trustee in relation to a pension scheme or which is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme;

(e) any business which consists in operating or acting as trustee in relation to a collective investment scheme or is carried on by the operator or trustee of such a scheme in connection with or for the purposes of the scheme.

(6) An agreement is effected on a facility or an exchange for the purposes of this section if (and only if)—

(a) it is subject to the rules of the facility or exchange ; and

(b) it is reported to the facility or exchange in accordance with the rules of the facility or exchange .

(6A) The Commissioners may approve a person for the purposes of this section only if the person

(a) is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account), whether or not the person is authorised under the Directive or

(b) has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

Section 88B Intermediaries: supplementary.

(1) For the purposes of section 88A above the question whether a person is connected with another shall be determined in accordance with the provisions of section 1122 of the Corporation Tax Act 2010 .

(2) In section 88A above and this section—

“ collective investment scheme ” has the meaning given in section 235 of the Financial Services and Markets Act 2000 ;

“ the Directive ” means Directive 2004/39/ EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, as amended from time to time;

...

“ EEA State ” , in relation to any time, means a State which at that time is a member State or any other State which at that time is a contracting party to the agreement on the European Economic Area signed at Oporto on the 2nd May 1992 as adjusted by the Protocol signed at Brussels on the 17th March 1993 (as modified or supplemented from time to time) ;

“ insurance business ” means business which consists of the effecting or carrying out of contracts of insurance and, for the purposes of this definition, “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

“ multilateral trading facility ” has the meaning given by section 80B(2);

“ quoted or listed options ” means options which are quoted on or listed by a multilateral trading facility, a regulated market or a recognised foreign options exchange;

“ recognised foreign exchange ” and “ recognised foreign options exchange ” have the meanings given, respectively, by subsections (3) and (4) of section 80B above;

“ regulated market ” has the meaning given by section 80B(2);

“ trustee ”, in relation to a collective investment scheme, means a trustee or a depositary within the meaning given in section 237(2) of the Financial Services and Markets Act 2000.

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In section 88A above “ the exercise of a relevant option ” means—

(a) the exercise by B of an option to buy securities; or

(b) the exercise of an option binding B to buy securities.

(3A) The Treasury may by regulations amend section 88A above and this section (as they have effect for the time being) in order to extend the exemption from tax under that section.

(4) The Treasury may by regulations provide that section 88A above shall not have effect in relation to kinds of agreement specified in the regulations.

(5) The Treasury may by regulations provide that if—

(a) an agreement falls within any of subsections (1) to (2C) of section 88A above, and

(b) section 87 above would, apart from section 88A, apply to the agreement,

section 87 shall apply to the agreement but with the substitution of a rate of tax not exceeding 0.1 per cent. for the rate specified in subsection (6) of that section.

(6) The Treasury may by regulations change the meaning of “ intermediary ” or “ options intermediary ” for the purposes of section 88A above by amending subsection (4) or (5) of that section (as it has effect for the time being).

(7) The power to make regulations under subsections (3A) to (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 89 Section 87: exceptions for market makers etc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 89A Section 87: exceptions for public issues.

(1) Section 87 above shall not apply as regartds an agreement to transfer securities other than units under a unit trust scheme to B or B's nominee if —

(a) the agreement is part of an arrangement, entered into by B in the ordinary course of B's business as an issuing house, under which B (as principal) is to offer the securities for sale to the public,

(b) the agreement is conditional upon the admission of the securities to the Offical List of The Stock Exchange,

(c) the consideration under the agreement for each security is the same as the price at which B is to offer the security for sale, and

(d) B sells the securities in accordance with the arrangement referred to in paragraph (a) above.

(2) Section 87 above shall not apply as regards an agreement if the securities to which the agreement relates are newly subscribed securities other than units under a unit trust scheme and —

(a) the agreement is made in pursuance of an offer to the public made by A (as principal) under an arrangement entered into in the ordinary course of A's business as an issuing house,

(b) a right of allotment in respect of, or to subscribe for, the securities has been acquired by A under an agreement which is part of the arrangement,

(c) both those agreements are conditional upon the admission of the securities to the Offical List of The Stock Exchange, and

(d) the consideration for each security is the same under both agreements;

and for the purposes of this subsection, “ newly subscribed securities ” are securities which, in pursuance of the arrangement referred to in paragraph (a) above, are issued wholly for new consideration.

(3) Section 87 above shall not apply as regards an agreement if the securities to which the agreement relates are registered securities other than units under a unit trusty scheme and —

(a) the agreement is made in pursuance of an offer to the public made by A,

(b) the agreement is conditional upon the admission of the securities to the Offical List of The Stock Exchange, and

(c) under the agreement A issues to B or his nominee a renounceable letter of acceptance, or similar instrument, in respect of the securities.

(4) The Treasury may by regulations amend paragraph (b) of subsection (1) above, paragraph (c) of subsection (2) above, and paragraph (b) of subsection (3) above (as they have effect for the time being); and the power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 89B Section 87: exceptions for stock lending and collateral security arrangements.

(1) Where a person (P) has contracted to sell chargeable securities of a particular kind in the ordinary course of his business as a market maker in chargeable securities of that kind and, to enable him to fulfil the contract, he enters into an arrangement under which—

(a) another person (Q) is to transfer chargeable securities to P or his nominee, and

(b) in return, chargeable securities of the same kind and amount are to be transferred (whether or not by P or his nominee) to Q or his nominee,

section 87 above shall not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.

(2) Where the arrangement mentioned in subsection (1) above is also one under which—

(a) an amount of chargeable securities of some other kind is to be transferred by P or his nominee to Q or his nominee by way of security for the performance of the obligation described in paragraph (b) of that subsection, and

(b) on performance of that obligation, the securities mentioned in paragraph (a) above, or chargeable securities of the same kind and amount as those securities, are to be transferred to P or his nominee,

section 87 above shall also not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.

(3) Where, to enable Q to make the transfer to P or his nominee which is mentioned in paragraph (a) of subsection (1) above, Q enters into an arrangement under which—

(a) another person (R) is to transfer chargeable securities to Q or his nominee, and

(b) in return, chargeable securities of the same kind and amount are to be transferred (whether or not by Q or his nominee) to R or his nominee,

section 87 above shall not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.

(4) Where the arrangement mentioned in subsection (3) above is also one under which—

(a) an amount of chargeable securities of some other kind is to be transferred by Q or his nominee to R or his nominee by way of security for the performance of the obligation described in paragraph (b) of that subsection, and

(b) on performance of that obligation, the securities mentioned in paragraph (a) above, or chargeable securities of the same kind and amount as those securities, are to be transferred to Q or his nominee,

section 87 above shall also not apply as regards an agreement to transfer chargeable securities which is made for the purpose of performing the obligation to transfer chargeable securities described in paragraph (a) or (b) above.

(5) For the purposes of this section a person is a market maker in chargeable securities of a particular kind if he—

(a) holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell chargeable securities of that kind at a price specified by him, and

(b) is recognised as doing so by The Stock Exchange.

(6) The Treasury may by regulations provide that for subsection (5) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a market maker for the purposes of this section.

(7) Regulations under subsection (6) above shall apply in relation to any agreement to transfer chargeable securities in pursuance of an arrangement entered into on or after such day after 1st July 1996 as is specified in the regulations.

(8) The power to make regulations under subsection (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 89AA Section 87: exception for repurchases and stock lending.

(1) This section applies where a person (P) has entered into an arrangement with another person (Q) under which—

(a) Q is to transfer chargeable securities of a particular kind to P or his nominee, and

(b) chargeable securities of the same kind and amount are to be transferred by P or his nominee to Q or his nominee,

and the conditions set out in subsection (2A) or (3) below are fulfilled.

(2) Section 87 above shall not apply as regards an agreement to transfer chargeable securities to P or his nominee or Q or his nominee in accordance with the arrangement.

(2A) The conditions in this subsection are—

(a) that P or Q

(i) is authorised under the law of an EEA State or Gibraltar to provide any of the investment services or activities listed in Section A 2 or 3 of Annex I to the Directive (execution of orders on behalf of clients and dealing on own account) in relation to securities of the kind concerned, whether or not P or Q is authorised under the Directive; ... or

(ii) has permission under the Financial Services and Markets Act 2000 to carry on any of the investment services or activities in paragraph 2 or 3 of Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

(b) that securities of the kind concerned are regularly traded on a regulated market ; and

(c) that chargeable securities are transferred to P or his nominee and Q or his nominee in pursuance of the arrangement.

(3) The conditions in this subsection are—

(a) that the agreement is effected on a regulated market, a multilateral trading facility or a recognised foreign exchange;

(b) that securities of the kind concerned are regularly traded on that market, facility or exchange; and

(c) that chargeable securities are transferred to P or his nominee and Q or his nominee in pursuance of the arrangement.

(4) An arrangement does not fall within subsection (1) above if—

(a) the arrangement is not such as would be entered into by persons dealing with each other at arm’s length; or

(b) under the arrangement any of the benefits or risks arising from fluctuations, before the transfer to Q or his nominee takes place, in the market value of the chargeable securities accrues to, or falls on, P.

(5) An agreement is effected on a market, a facility or an exchange for the purposes of subsection (3) above if (and only if)—

(a) it is subject to the rules of the market, facility or exchange ; and

(b) it is reported to the market, facility or exchange in accordance with the rules of the market, facility or exchange .

(6) In this section—

“ the Directive ” has the meaning given in section 88B(2) above;

“ EEA State ” has the meaning given in section 88B(2) above;

...

“multilateral trading facility” has the meaning given in section 80B(2);

“regulated market” has the meaning given in section 80B(2).

“ recognised foreign exchange ” has the meaning given in section 80B(3) above.

(6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) The Treasury may by regulations provide that if section 87 would apply as regards an agreement but for subsection (2) above, section 87 shall apply as regards the agreement but with the substitution of a rate of tax not exceeding 0.1 per cent. for the rate specified in subsection (6) of that section.

(8) The Treasury may by regulations amend this section (as it has effect for the time being) in order—

(a) to change the conditions for exemption from tax under this section; or

(b) to provide that this section does not apply in relation to kinds of arrangement specified in the regulations.

(9) The power to make regulations under subsection (7) or (8) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Section 89AB Section 87: exception for repurchases and stock lending in case of insolvency

(1) This section applies where—

(a) P and Q have entered into an arrangement falling within section 89AA(1),

(b) the only reason that the conditions in subsection (2A) or (3) of that section are not met is that chargeable securities of the same kind and amount as those transferred to P or P's nominee are not transferred to Q or Q's nominee, and

(c) the conditions in subsection (2) below are met.

(2) The conditions in this subsection are that—

(a) P and Q are not connected persons within the meaning of section 1122 of the Corporation Tax Act 2010 ,

(b) after Q has transferred securities under the arrangement, either P or Q becomes insolvent,

(c) it becomes apparent (whether before or after the insolvency occurs) that, as a result of the insolvency, securities will not be transferred to Q or Q's nominee in accordance with the arrangement.

(3) Section 87 does not apply as regards an agreement to transfer chargeable securities to P or P's nominee, or Q or Q's nominee, in accordance with the arrangement.

(4) Subsections (5) and (6) apply if—

(a) the party who does not become insolvent (“the solvent party”) or the solvent party's nominee acquires replacement securities, and

(b) the replacement securities are acquired before the end of the period of 30 days beginning with the day on which the insolvency occurs (“the insolvency date”).

(5) Where collateral is provided under the arrangement (or under arrangements of which that arrangement forms part), section 87 does not apply as regards any agreement to transfer to the solvent party or the solvent party's nominee—

(a) replacement securities acquired using the collateral (whether directly or indirectly), or

(b) where the solvent party uses the whole of the value of the collateral to acquire replacement securities, any further replacement securities.

(6) Where no collateral is provided as mentioned in subsection (5), section 87 does not apply as regards any agreement to transfer replacement securities to the solvent party or the solvent party's nominee.

(7) Subsections (5) and (6) may apply as regards more than one agreement (and where those subsections apply as regards more than one agreement, the agreements may be with different persons).

(8) But those subsections apply only as regards replacement securities up to the amount of securities which will not be transferred as a result of the insolvency.

(9) For the purposes of this section a person becomes insolvent—

(a) if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,

(b) if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,

(c) on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,

(d) if an individual voluntary arrangement takes effect under Part 8 of that Act,

(e) on the making of a bankruptcy application or presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),

(f) if a compromise or arrangement takes effect under Part 26 or 26A of the Companies Act 2006,

(g) if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,

(h) if a bank administration order takes effect under Part 3 of that Act, ...

(ha) if a special administration order takes effect under the Investment Bank Special Administration Regulations 2011, ...

(hb) if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or

(i) on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.

(10) In this section—

“ collateral ” means an amount of money or other property which is payable to, or made available for the benefit of, a party to an arrangement or that party's nominee for the purpose of securing the discharge of the requirement to transfer securities to that party or the nominee;

“replacement securities”, in the event of a party to an arrangement becoming insolvent, are chargeable securities of the same kind as the securities which will not be transferred to the other party or that party's nominee as a result of the insolvency.

Section 90 Section 87: other exceptions

(1) Section 87 above shall not apply as regards an agreement to transfer a unit under a unit trust scheme to or from the managers under the scheme.

(1A) Section 87 above shall not apply as regards an agreement to transfer a unit under a unit trust scheme if an instrument executed at the same time as the agreement and giving effect to the agreement would be exempt from stamp duty (if stamp duty were otherwise chargeable) by virtue of—

(a) section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954 (transfers between associated companies), or

(b) regulations under section 87(2) of the Finance Act 1985 (power to exempt instruments from stamp duty of fixed amount) , or

(c) section 96 of the Finance Act 1997 (demutualisation of insurance companies).

(1B) Section 87 above shall not apply as regards an agreement to transfer trust property to the unit holder on the surrender to the managers of a unit under a unit trust scheme if the unit holder is to receive only such part of each description of asset in the trust property as is proportionate to, or as nearly as practicable proportionate to, the unit holder's share.

For these purposes there is a surrender of a unit where—

(a) a person (“P”) authorises or requires the trustees or managers of a unit trust scheme to treat P as no longer interested in a unit under the scheme, or

(b) a unit under the unit trust scheme is transferred to the managers of the scheme,

and the unit is a chargeable security.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Section 87 above shall not apply as regards an agreement to transfer securities constituted by or transferable by means of —

(a) a non-UK bearer instrument;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3A) Section 87 above shall not apply as regards an agreement to transfer chargeable securities constituted by or transferable by means of a UK bearer instrument unless subsection (3B), (3C) or (3E) below applies to the instrument.

(3B) This subsection applies to any instrument which falls within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc.) .

(3C) This subsection applies to an instrument if—

(a) the instrument was issued by a body corporate incorporated in the United Kingdom (other than an SE which has its registered office outside the United Kingdom following a transfer in accordance with Article 8 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)) ; and

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) the instrument is not exempt.

(3D) An instrument is exempt for the purposes of subsection (3C) above if—

(a) the chargeable securities in question are, or a depositary receipt for them is, listed on a recognised stock exchange; and

(b) the agreement to transfer those securities is not made in contemplation of, or as part of an arrangement for, a takeover of the body corporate which issued the instrument.

(3E) This subsection applies to an instrument if—

(a) the instrument was issued by a body corporate incorporated in the United Kingdom (other than an SE which has its registered office outside the United Kingdom following a transfer in accordance with Article 8 of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea)) ;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) by virtue of section 79(5) (convertible loan capital) or 79(6) (loan capital carrying special rights) above, stamp duty would be chargeable on an instrument transferring the loan capital to which the instrument relates; and

(d) the instrument is not exempt.

(3F) An instrument is exempt for the purposes of subsection (3E) above if—

(a) the chargeable securities in question are, or a depositary receipt for them is, listed on a recognised stock exchange;

(b) the agreement to transfer those securities is not made in contemplation of, or as part of an arrangement for, a takeover of the body corporate which issued the instrument; and

(c) those securities do not carry any right of the kind described in section 79(5) above (right of conversion into, or acquisition of, shares or other securities) by the exercise of which chargeable securities which are not listed on a recognised stock exchange may be obtained.

(4) Section 87 above shall not apply as regards an agreement which forms part of an arrangement.

(a) falling within section 93(1) or 96(1) below , or

(b) which would fall within section 93(1) or section 96(1) if the references in section 93 or section 96 (as the case may be) to the transfer of chargeable securities included the issue of chargeable securities.

(5) Section 87 above shall not apply as regards an agreement to transfer securities which the Board are satisfied are held, when the agreement is made, by a person within subsection (6) below.

(6) A person is within this subsection if his business is exclusively that of holding shares, stock or other marketable securities —

(a) as nominee or agent for a person whose business is or includes the provision of clearance services for the purchase and sale of shares, stock or other marketable securities, and

(b) for the purpose of such part of the business mentioned in paragraph (a) above as consists of the provision of such clearance services (in a case where the business does not consist exclusively of that); and in this subsection, 'marketable securities' shall be construed in accordance with section 122(1) of the Stamp Act 1891 .

(7) Section 87 above shall not apply as regards an agreement to transfer securities to —

(a) a charitable company , or

(b) the trustees of a charitable trust , or

(c) the Trustees of the National Heritage Memorial Fund, or

(d) the Historic Buildings and Monuments Commission for England. ...

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7A) Section 87 above does not apply as regards an agreement to transfer any shares in a company which are held by the company (whether in accordance with section 724 of the Companies Act 2006 (treasury shares) or otherwise).

(7B) Section 87 above does not apply as regards—

(a) an agreement to transfer chargeable securities—

(i) to a depositary under a co-ownership contractual scheme, to be held as part of the property subject to the scheme, in exchange for the issue of units in the scheme (and for no other consideration);

(ii) in relation to a co-ownership contractual umbrella scheme, on transfers between sub-schemes;

(b) an agreement to transfer units in a co-ownership contractual scheme.

(7BA) In subsection (7B) and this subsection—

“ authorised contractual scheme ” has the meaning given in section 237(3) of the Financial Services and Markets Act 2000;

“ co-ownership contractual scheme ” means—

an authorised contractual scheme, or

a Reserved Investor Fund (Contractual Scheme);

“ co-ownership contractual umbrella scheme ” means a co-ownership contractual scheme—

which provides arrangements for separate pooling of the contributions of participants and of the profits or income out of which payments are to be made to them, and

under which the participants are entitled to exchange rights in one pool for rights in another;

“ depositary ” has the meaning given in section 237(2) of the Financial Services and Markets Act 2000;

“ Reserved Investor Fund (Contractual Scheme) ” has the meaning given by section 20 of the Finance (No.2) Act 2024;

“ sub-scheme ”, in relation to a co-ownership contractual umbrella scheme, means such of the arrangements as relate to a separate pool;

“ units ” has the meaning given in section 237(2) of the Financial Services and Markets Act 2000.

(7C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7D) Subsection (7B) shall not apply where the agreement forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of stamp duty or stamp duty reserve tax.

(8) For the purposes of subsections (3D) and (3F) above—

(a) references to a depositary receipt for chargeable securities shall be construed in accordance with section 94(1) below;

(b) references to anything listed on a recognised stock exchange shall be construed in accordance with section 1005 of the Income Tax Act 2007;

(c) there is a takeover of a body corporate if a person, on his own or together with connected persons, loses or acquires control of it.

(9) For the purposes of subsection (8) above—

(a) any question whether a person is connected with another shall be determined in accordance with section 286 of the Taxation of Chargeable Gains Act 1992;

(b) “ control ” shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 .

Section 91 Liability to tax

(1) Where tax is charged under section 87 above as regards an agreement, B shall be liable for the tax.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 92 Repayment or cancellation of tax

(1) If, as regards an agreement to transfer securities to B or his nominee, tax is charged under section 87 above and it is proved to the Board's satisfaction that at a time on or after the relevant day (as defined in section 87(3)) but before the expiry of the period of six years (beginning with that day) the conditions mentioned in subsections (1A) and (1B) below have been fulfilled, subsections (2) to (4A) of this section shall apply .

(1A) The first condition is that an instrument is (or instruments are) executed in pursuance of the agreement and the instrument transfers (or the instruments between them transfer) to B or, as the case may be, to his nominee all the chargeable securities to which the agreement relates.

(1B) The second condition is that the instrument (or each instrument) transferring the chargeable securities to which the agreement relates—

(a) so far as those securities are stock or marketable securities within the meaning of section 125 of the Finance Act 2003 (abolition of stamp duty except on instruments relating to stock or marketable securities)—

(i) is duly stamped in accordance with the enactments relating to stamp duty, or

(ii) is not chargeable with stamp duty or otherwise required to be stamped under those enactments; or

(b) so far as those securities are not stock or marketable securities within the meaning of that section, is an instrument that, disregarding that section, would not be chargeable with any ad valorem stamp duty under those enactments.

(1C) If, as regards an agreement to transfer shares in a company to that company (“ the own-shares agreement ”)—

(a) tax is charged under section 87 above, and

(b) it is proved to the Board’s satisfaction that at a time in the period of six years beginning on the relevant day (as defined in section 87(3)) the conditions mentioned in subsection (1D) have been fulfilled in respect of those shares,

subsections (2) to (4A) apply.

(1D) The conditions referred to in subsection (1C) are—

(a) that, in relation to the transfer made in pursuance of the own-shares agreement, a return has been made in respect of each of those shares in accordance with section 707 of the Companies Act 2006 (disclosure by company of purchase of own shares), and

(b) that any such return has been duly stamped in accordance with section 66.

(2) If any of the tax charged has been paid, and a claim for repayment is made within the period of six years mentioned in subsection (1) or, as the case may be, (1C) above, the tax paid shall be repaid; and where the tax paid is not less than £25 it shall be repaid with interest on it at the rate applicable under section 178 of the Finance Act 1989 from the time it was paid.

(3) To the extent that the tax charged has not been paid, the charge shall be cancelled by virtue of this subsection.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4A) Interest paid under subsection (2) above shall not constitute income for any tax purposes.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) In this section “ the enactments relating to stamp duty ” means the Stamp Act 1891 and any enactment which amends or is required to be construed together with that Act.

(7) This section shall have effect in relation to a person to whom the chargeable securities are transferred by way of security for a loan to B as it has effect in relation to a nominee of B.

Section 93 Depositary receipts : 1.5% charge

(1) ... There shall be a charge to stamp duty reserve tax under this section where in pursuance of an arrangement —

(a) a person falling within subsection (2) below has issued or is to issue a depositary receipt for chargeable securities, and

(b) chargeable securities of the same kind and amount are transferred ... to the person mentioned in paragraph (a) above or a person falling within subsection (3) below, or are appropriated by the person mentioned in paragraph (a) above or a person falling within subsection (3) below towards the eventual satisfaction of the entitlement of the receipt's holder to receive chargeable securities.

(1A) The following provisions contain exceptions to the charge to stamp duty reserve tax under this section—

(a) subsection (7) of this section (exception so far as stamp duty is chargeable);

(b) section 95 (general exceptions);

(c) section 95A (replacement securities);

(d) section 97AB (exempt capital-raising transfers);

(e) section 97AC (exempt listing transfers);

(f) section 97AD (exception for transfers of shares held by issuing company);

(g) section 97B (transfers between depositary receipt system and clearance system).

(2) A person falls within this subsection if his business is or includes issuing depositary receipts for chargeable securities.

(3) A person falls within this subsection if his business is or includes holding chargeable securities as nominee or agent for the person who has issued or is to issue the depositary receipt.

(4) Subject to subsections (6) and (7) below, tax under this section shall be charged at the rate of 1.5 per cent. of the following—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) in a case where the securities are transferred for consideration in money or money's worth—

(i) the amount or value of the consideration, or

(ii) where subsection (4A) applies, the amount or value of the consideration or, if higher, the value of the securities;

(c) in any other case, the value of the securities.

(4A) This subsection applies where the transfer of the securities is pursuant to—

(a) the exercise of an option to buy or to sell the securities, and

(b) either—

(i) a term of the option which provides for the securities to be transferred to the person falling within subsection (2) or (3), or

(ii) a direction, given by or on behalf of the person entitled or bound to acquire the securities pursuant to the exercise of the option, for the securities to be so transferred.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) In a case where—

(a) securities are issued, or securities sold are transferred, and (in either case) they are to be paid for in instalments,

(b) the person to whom they are issued or transferred holds them and transfers them to another person when the last instalment is paid,

(c) subsection (4)(c) above applies in the case of the transfer to the other person,

(d) before the making of the transfer to the other person an instrument is received by a person falling within subsection (2) or (3) above,

(e) the instrument so received evidences all the rights which (by virtue of the terms under which the securities are issued or sold as mentioned in paragraph (a) above) subsist in respect of them at the time of the receipt, and

(f) the transfer to the other person is effected by an instrument containing a statement that paragraphs (a), (b) and (e) above are fulfilled,

subsection (4)(c) above shall have effect as if the reference to the value there mentioned were to an amount (if any) equal to the total of the instalments payable, less those paid before the transfer to the other person is effected.

(7) Where tax is (or would apart from this subsection be) charged under this section in respect of a transfer of securities, and ad valorem stamp duty is chargeable on any instrument effecting the transfer, then —

(a) if the amount of the duty is less than the amount of tax found by virtue of subsections (4) and (6) above, the tax charged under this section shall be the amount so found less the amount of the duty;

(b) in any other case, there shall be no charge to tax under this section in respect of the transfer.

(8) Where tax is charged under the preceding provisions of this section, the person liable for the tax shall (subject to subsection (9) below) be the person who has issued or is to issue the depositary receipt.

(9) Where tax is charged under the preceding provisions of this section in a case where securities are transferred, and at the time of the transfer the person who has issued or is to issue the depositary receipt is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the person liable for the tax shall be the person to whom the securities are transferred.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) Subject to subsection (12) below, this section applies where securities are transferred, issued or appropriated after 18th March 1986 (whenever the arrangement was made).

(12) This section does not apply, in the case of securities which are transferred, if the Board are satisfied that they were acquired or appropriated by the transferor on or before 18th March 1986 for or towards the eventual satisfaction of the entitlement of a person to receive securities of the same kind under a depositary receipt (whether issued on or before that date or to be issued after that date).

Section 94 Depositary receipts: supplementary

(1) For the purposes of sections 93 and 97AC a depositary receipt for chargeable securities is an instrument acknowledging —

(a) that a person holds chargeable securities or evidence of the right to receive them, and

(b) that another person is entitled to rights, whether expressed as units or otherwise, in or in relation to chargeable securities of the same kind, including the right to receive such securities (or evidence of the right to receive them) from the person mentioned in paragraph (a) above,

except that for those purposes a depositary receipt for chargeable securities does not include an instrument acknowledging rights in or in relation to securities if they are issued or sold under terms providing for payment in instalments and for the issue of the instrument as evidence that an instalment has been paid.

(2) The Treasury may by regulations provide that for subsection (1) above (as it has effect for the time being) there shall be substituted a subsection containing a different definition of a depositary receipt for the purposes of section 93 above.

(3) For the purposes of section 93(4)(b) above the value of any consideration not consisting of money shall be taken to be the price it might reasonably be expected to fetch on a sale in the open market at the time the securities are transferred.

(4) For the purposes of section 93(4)(b)(ii) and (c) above the value of the securities shall be taken to be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred or appropriated (as the case may be).

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) The power to make regulations or an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.