July 2026 | Policy briefing for members
If you have ever bought UK shares, you have paid stamp duty – probably without noticing. The 0.5% charge is collected automatically by your broker when you deal, and for most investors that is the beginning and end of the matter. That is about to change in some respects, but stay reassuringly the same in others. This briefing explains what HMRC is proposing, when it is likely to happen, and what – if anything – you need to do about it.
What is changing?
The UK currently operates two parallel taxes on share purchases: stamp duty (charged on paper transfers, principally stock transfer forms) and stamp duty reserve tax (SDRT) (charged on electronic transfers, principally those settled through the CREST system). Both are levied at 0.5% of the price paid, but they have different rules, different exemptions and different administrative processes. The stamp duty side of the system dates back, in essence, to 1694 and still depends on documents being sent to HMRC for processing.
HMRC intends to replace both taxes with a single, self-assessed tax – the Securities Transfer Charge (STC) – charged at the same 0.5% rate. Transactions settled through CREST (which covers virtually all on-market share dealing) will continue to have the tax collected automatically, exactly as SDRT is today. Transactions taking place outside CREST – so-called off-market transfers – will be reported and paid through a new HMRC online portal, replacing the current paper stamping process.
The government’s stated target is to introduce the new tax, its legislation and the online portal in 2027. Finance Act 2026 took an enabling power allowing HMRC to run a live pilot of the digital service, and testing is expected to begin ahead of full implementation.
For most members: nothing changes when you deal
It is worth being clear at the outset: if your share dealing consists of buying and selling listed shares through a broker or platform, you will see no difference. The 0.5% charge will continue to be calculated and collected automatically at the point of settlement. You will not need to register for the portal, file anything, or interact with HMRC. AIM shares also remain exempt, as they have been since 2014.
Where you may notice the change: off-market transfers
The new regime bites where shares change hands outside the market. Typical examples for individual investors include:
- gifting shares to a family member;
- transferring shares on divorce or as part of estate administration;
- buying or selling shares in a private company;
- moving certificated shares between names using a stock transfer form.
Today, where tax is due on such a transfer, the buyer sends the stock transfer form to HMRC, pays the duty, and waits – sometimes for weeks – for confirmation before the company’s registrar will update the share register. Under the new system, the transaction will be reported through the online portal, which will immediately issue a unique transaction reference number (UTRN). The registrar can act on the UTRN straight away, so registration should become possible on the same day. That is a genuine and welcome improvement.
The catches: what ShareSoc is concerned about
First, the small-transfer exemption is being removed. At present, transfers where the consideration is £1,000 or less do not need to be sent to HMRC at all. HMRC intends to remove this de minimis threshold – despite the majority of consultation responses opposing the change. The practical effect is that small gifts and low-value family transfers, currently outside the process entirely, will be drawn into the reporting net even where little or no tax is at stake.
Second, the legal responsibility shifts to you. Stamp duty is often described as a “voluntary” tax: the sanction for not paying is that the transfer cannot be registered, rather than personal penalties. Under the STC, the buyer becomes the liable and accountable person for a self-assessed tax, with HMRC’s standard penalty and interest regime applying to late or incorrect returns. An investor making a once-in-a-lifetime off-market transfer will face the same compliance machinery as a professional user – typically without an adviser. ShareSoc regards this as an error trap for the unrepresented individual, and will be pressing for a proportionate penalty regime and clear, plain-English guidance.
Third, this is yet another standalone HMRC system. Consultation respondents raised concerns about the portal’s design, capacity and resilience, and about additional burdens falling on investors and registrars. HMRC’s delivery record on major digital programmes suggests the 2027 date should be treated with a degree of caution.
The wider picture: is stamp duty on shares on the way out?
There is a respectable and growing body of opinion – which ShareSoc shares – that the 0.5% charge should be abolished altogether. It is a tax on transactions rather than on profit; its cost ultimately falls on pension funds and individual investors through lower share prices and wider dealing spreads; and it puts UK-listed companies at a disadvantage against US and other overseas peers whose shares can be bought free of any equivalent charge. The design is also perverse: market makers, derivatives and overseas shares are all outside the charge, so the burden lands squarely on the long-term investor buying UK shares to hold.
Notably, the government has already conceded the argument in miniature. At the Autumn Budget in November 2025 it introduced a three-year exemption from the 0.5% charge for companies newly listing in the UK, on the express basis that removing the tax supports valuations and liquidity. If that logic holds for new listings, it holds for the whole market. Abolition would also remove a long-standing unfairness for investment trusts, whose shares attract the charge while purchases of open-ended funds generally do not.
Against this, the two taxes raise some £3–4 billion a year at very low collection cost, and the state of the public finances makes the Treasury reluctant to give that up – which is why, for now, the government is rebuilding the machinery of the tax rather than retiring it.
How firm is the timetable?
The direction of travel is settled: the government confirmed at the Autumn Budget 2025 that the project is proceeding, and the enabling powers for the pilot are now law. But the substantive legislation creating the STC has not yet been enacted, and 2027 remains a target rather than a statutory deadline. The project began with an Office of Tax Simplification report in 2017, and key elements – including the treatment of the higher-rate 1.5% charge and the detailed design of the portal – are still being worked through. Members should regard 2027 as the earliest realistic date, with some risk of slippage into 2028.
What should you do?
- Nothing, for ordinary broker dealing – the change is invisible to you.
- If you are planning an off-market transfer (a gift, an estate transfer, a private company sale), be aware that the process, and your personal obligations, will change once the new regime commences. Until then, the existing stamping process continues to apply.
- If you hold paper share certificates, note that this reform is proceeding in parallel with the separate dematerialisation (“DEMAT”) programme, which will eventually end paper certificates. ShareSoc is engaged on both fronts and is pressing for the two programmes to be designed with the retail investor’s overall burden in mind.
ShareSoc’s position
ShareSoc supports the simplification of an antiquated dual system and welcomes same-day registration for off-market transfers. However, we will be making representations to HMRC on three points in particular: the restoration (and preferably the raising) of a de minimis threshold for small transfers; a light-touch, proportionate penalty regime for unrepresented individuals; and clarity on how the portal will interact with dematerialisation. More fundamentally, we will continue to argue that the right long-term destination for this tax is abolition – and that the government should not lose sight of that while investing in new machinery to collect it.
We will keep members informed as draft legislation is published. If you have experience of the current stamping process – good or bad – that you would like to feed in, please contact the Policy Committee.
Sources: Modernisation of the Stamp Taxes on Shares Framework – Summary of responses (HMRC, 28 April 2025); Modernisation of the Stamp Taxes on Shares Framework – Policy Paper (HMRC, 26 November 2025); Stamp Duty Reserve Tax — UK Listing Relief (HMRC, 26 November 2025); Finance Act 2026. This briefing is provided for general information and does not constitute tax or legal advice.
