Autumn Budget 2025 introduced a three year relief from the standard 0.5 percent stamp duty reserve tax charge on agreements to transfer securities when a company first lists its shares on a UK regulated market. Effective from 27 November 2025, the relief aims to encourage both UK and overseas companies to list in the UK. Whilst broadly welcomed, it remains to be seen whether a single incentive is sufficient to achieve this broader aim.
The listing relief
The relief from the standard 0.5 percent stamp duty reserve tax charge introduced in the Autumn Budget with immediate effect (from 27 November 2025), and now included in the Finance Bill, applies to agreements to transfer securities of a company for a period of three years from the date that company first lists those securities on a UK regulated market. It also extends to overseas companies listing in the UK by way of depositary interests representing their shares. It was introduced with the aim of encouraging both UK and overseas companies to choose London as their listing venue by ensuring that ongoing trading can be carried out without a stamp duty reserve tax cost for investors.
The relief will not be confined only to the listed shares, but will also apply to all securities of the company traded after the share listing that are within the scope of stamp duty reserve tax. This means that debt securities, for example, should also benefit whether or not they would qualify for any other relief, such as the loan capital exemption from stamp duty and stamp duty reserve tax.
Practically CREST (the UK settlement system) will need to be notified by the relevant person (expected to be the registrar or issuer) that the securities qualify for the relief and that they should be flagged as exempt.
What is excluded?
As with most reliefs, the rules may be open to interpretation and subject to practical application. The relief does not extend to stamp duty so will not be available for transactions that are papered rather than carried out electronically. This would be expected to be rare, so it is unlikely to have any widespread impact. Importantly, it also does not apply to the higher rate 1.5 percent charge that is triggered when existing shares are transferred to overseas depositary receipt or clearance service systems. On a practical note, where the higher rate charge applies for securities that are flagged as exempt in CREST, it will need to be paid manually outside of CREST.
To ensure that relief is restricted to companies that are genuinely listing for the first time there are also exclusions where the listing is part of arrangements for, or involving:
- Mergers of listed companies, either through a change of control of a previously listed company or a merger of businesses of listed companies; or
- The insertion of a new holding company above a company that was listed (unless that listing was confined to depositary interests).
Note also that the relief does not apply to agreements to transfer that are part of arrangements changing control of the company.
The three year period
In most cases, the three year relief period will start from the date when the shares (or depositary interests) are first admitted to the Official List. However, this period is delayed for listed special purpose acquisition vehicles, with assets comprising only cash or short-dated securities, that are set up to acquire an unlisted company. In those cases, the period does not start until the company makes the first regulatory announcement that it has taken over control of the unlisted target company.
The listing relief period would be cut short if there is a change of control within the three year period or where the shares cease to be listed. However, a temporary suspension of trading does not end the period.
What's next?
The measure has been widely seen as positive although it remains to be seen whether it alone will have the desired effect of stimulating investment and building confidence in the UK listings market. If it is successful, either in whole or part, then it may add more weight to the ongoing call for the complete removal of the tax.
In the meantime, the ongoing project for modernising UK stamp taxes continues with a new single tax – the Securities Transfer Charge expected to be introduced in 2027. A digital service will be used to assess and pay the charge on off-market transfers. The Autumn Budget also included a power for HMRC to make regulations that will allow those taking part in testing this to report and pay the tax using the digital service.
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