HM Revenue & Customs published a policy paper on 13 July 2026 confirming plans to replace the UK's two-track Stamp Taxes on Shares regime with a single, self-assessed levy known as the Securities Transfer Tax. The paper appeared as part of the annual Legislation Day package and set a target of 2027 for the new tax to take effect, alongside a purpose-built online portal for reporting and payment. Both Stamp Duty and Stamp Duty Reserve Tax (SDRT) currently charge 0.5% of the consideration paid for shares, but the mechanics differ enough between the two that HMRC has opted to replace them outright rather than amend either one separately.
Two taxes doing one job
Stamp Duty applies when a share transfer is recorded on a paper stock transfer form and the transaction is worth more than £1,000. The buyer has 30 days from signing the form to pay HMRC directly, and the transfer is not legally effective until the payment clears. SDRT applies instead to electronic transfers, and it carries no £1,000 threshold at all — a £200 trade attracts the same 0.5% charge as a £200,000 one. For shares settled through CREST, the UK's electronic settlement system, SDRT is deducted automatically, usually within two business days of settlement, which is why most retail investors buying through an online broker never see the charge listed as a separate line item. It simply gets folded into the total cost of the trade. A higher 1.5% rate applies in narrower circumstances, chiefly when UK shares are transferred into depositary receipt schemes or clearance services.
What the new tax changes
Under the Securities Transfer Tax proposal, both charges collapse into one 0.5% levy, but the collection method shifts from automatic deduction and stock-transfer-form payment to self-assessment. Paper-based transactions would move through a new HMRC online portal; uncertificated, electronic transfers would continue to run through CREST as before. According to the government's summary of consultation responses, the digital portal and the underlying legislation are being built in parallel, with their release timed to coincide. HMRC has consulted brokers, registrars and settlement providers throughout the process to shape the service around how transactions actually move through the system today.
Finance Act 2026 already contains a power allowing HMRC to pilot the digital service ahead of full commencement, letting a subset of taxpayers self-assess and submit stamp taxes on securities transactions electronically before the wider rollout begins. The government has also confirmed a four-year transitional period for arrangements entered into before the new regime takes effect, a measure meant to stop long-dated share schemes and existing agreements from being caught mid-structure by the switchover.
The £1,000 threshold disappears
One structural change buried in the proposal is the removal of the £1,000 de minimis threshold that currently exempts smaller paper-based share transfers from Stamp Duty. HMRC's stated reasoning is that the threshold exists mainly to spare small, manually processed transactions from disproportionate administrative burden — a rationale that weakens once the online portal makes reporting and payment equally simple regardless of transaction size. SDRT, notably, has never carried an equivalent threshold for electronic trades, so in practice the change mostly affects the shrinking pool of paper-based transfers rather than everyday online share dealing.
A separate, ongoing consultation covers the 1.5% higher rate that applies to depositary receipt and clearance service transfers. HMRC has not yet published an outcome on that strand, and the department has indicated the two workstreams are running on different timelines. Penalties and compliance provisions for the new tax broadly follow HMRC's original 2023 proposals, though the percentage-based approach to notification penalties has been adjusted following feedback from consultation respondents — full details are expected once draft legislation is published.
Cost stays the same, mechanism doesn't
The reform targets administration rather than the headline rate. A buyer purchasing £10,000 of shares through an online broker today pays £50 in SDRT, invisible inside the settlement price; under the Securities Transfer Tax, the same £50 charge would still apply, only reported through a different mechanism. The 0.5% rate also keeps UK share dealing more expensive than trading on its two largest rivals — neither the New York Stock Exchange nor Nasdaq levies an equivalent transaction tax, a gap that has come up repeatedly in industry submissions on London market competitiveness. HMRC's policy paper does not touch that comparison; it addresses only how the existing 0.5% is collected, not whether it should be lower.
A framework unchanged since the 1980s
The Stamp Taxes on Shares framework has operated in roughly its current form since SDRT was introduced in 1986 to extend Stamp Duty into the electronic settlement era that CREST would later formalise. The two taxes remain interdependent — SDRT still relies on definitions and reliefs originally written for Stamp Duty — which is part of why HMRC chose to replace the pair together rather than patch either one individually. The review dates back to an initial 2023 consultation on the framework, followed by further technical work on scope, penalties and the design of the digital service.
For brokers and registrars, the transition means reworking settlement systems that currently apply SDRT automatically through CREST so they instead support self-assessment reporting through the new portal. Several industry respondents flagged during consultation that this kind of systems change needs lead time well ahead of a 2027 start date. HMRC has said it will publish draft legislation and further guidance on the pilot scheme as the online service nears completion.