Stamp duty and SDRT - EU depository receipt systems and clearance services
1.5% charge on share issues to clearance services and depository receipt systems.
The measure
The Government has confirmed its intention to legislate in reaction to HSBC Holdings Plc and Vidacos Nominees Ltd vs HMRC, a European Court of Justice case declaring the 1.5% SDRT charge on the issue of UK shares into EU clearance services to be illegal. It does not plan to reverse that decision but wants to counteract arrangements under which EU clearance services or depositary receipt systems could have otherwise been used to route UK shares into non-EU equivalents free of the 1.5% stamp duty and SDRT charges.
Who will be affected?
UK companies issuing shares into non EU markets are potentially affected by this measure.
When?
The measure will be backdated to take effect from 1 October 2009, the date on which the decision was released.
These revisions are narrower than the initial announcement on 1 October 2009 and are likely to be confined to deliberate schemes to avoid the 1.5% charge, and may, therefore, cause less market disruption than was originally feared.
