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HMRC have decided not to appeal the First-tier Tribunal decision last June relating to the charge to stamp duty reserve tax (SDRT) at a rate of 1.5%.
The case concerned a transaction whereby shares in banking giant HSBC were transferred to the Bank of New York Mellon as an integral part of the raising of capital by HSBC. The tribunal said the SDRT charge was incompatible with EU law, in particular the capital duty directive.
The tribunal held that the directive applied to issuers situated in the EU, regardless of where their investors were located.
The Revenue has accepted the decision and will no longer seek to impose SDRT at 1.5% on issues of UK shares to depositary receipt issuers and clearance services outside the EU.
The department does not consider that the tribunal’s decision has an impact on transfers of shares and securities to depositary receipt systems or clearance services that are not an integral part of an issue of share capital; the stamp duty and SDRT charges continue to apply to such transactions.
HMRC will make repayments of SDRT to companies that have made repayment claims in respect of issues of UK shares to non-EU depositary receipt systems and clearance services, and whose appeals are currently stayed behind the decision in the HSBC/BNY Mellon case.
Statutory claims for repayment under reg 14 of the Stamp Duty Reserve Tax Regulations are also invited subject to the statutory time limits.
