Corporate tax update: what do I need to know?

Stamp Duty is a tax on physical (paper) documents transferring beneficial interest in shares and securities (often a stock transfer form (STF)). Stamp duty is payable at a rate of 0.5% of the amount or value of the shares being transferred, within 30 days of the transfer document being signed. While there is no obligation to pay stamp duty, there are consequences if a transfer document (e.g. a STF) is unstamped or improperly stamped.  The main consequence is that a company registrar is liable to penalties if they register new legal ownership of shares without evidence that Stamp Duty has been correctly paid on the STF.  There is currently a stamp duty exemption for shares that are transferred for less than £1,000. 

SDRT applies to agreements to transfer uncertificated (paperless) shares and other securities. Given the growth of paperless transactions, SDRT rather than Stamp Duty now applies to most transfers of shares and securities. It is charged on agreements to transfer “chargeable securities”. Most securities are settled through the Certificateless Registry for Electronic Share Transfer (CREST) settlement system (and are known as ‘dematerialised’ as they are held in electronic rather than ‘materialised’ paper form), with the calculation of the amount of SDRT due and payment made automatically through the system. The amount of SDRT and who pays is determined by the inputs or transaction flags made in the CREST system. 

SDRT is normally payable at 0.5% of the amount or value of the chargeable securities being transferred. SDRT is not payable where either a document has been stamped for Stamp Duty purposes or is exempt from Stamp Duty. Unlike Stamp Duty, there is a full and enforceable compliance regime for SDRT. 

In April 2023 (following discussions with an industry working group established to consider the modernisation and digitalisation of the STS framework) HMRC launched a consultation on proposals to reform the current STS framework with a mandatory single self-assessed tax on securities. On 28 April 2025, HMRC published a summary of responses to the consultation and its response.

HMRC has confirmed that it will reform the STS framework broadly as outlined in its consultation having made some modifications as a result of responses received during the consultation process. The key aspects of the reformed framework are: 

• A new mandatory, self-assessed single tax will replace stamp duty and SDRT
• The tax will apply to equity in UK incorporated companies, including securities (e.g. loan notes) with equity like features
• The buyer/acquirer of the transferred shares or securities will be liable for paying the tax
• Submission of the return/stock transfer form and payment of the tax will be via a new HMRC online portal
• The tax is charged at the earlier of substantial performance and completion of the relevant transfer (charging point), with substantial performance meaning a) when details of the transfer are submitted and matched within the relevant electronic settlement system (if applicable) – e.g. the CREST system; and b) on other cases, when the benefits of the relevant shares or securities (such as rights to dividend payments or voting rights) are exercisable by the buyer (or their nominee/intermediary).
• Payment of the single tax will be due within a) 4 days from the charging point for transfers carried out in electronic settlement systems; and b) 30 days from the charging point in other cases. 
• Taxpayers will be issued with a unique transaction reference number (UTRN) on submission of the relevant return/stock transfer form (rather than on payment of the tax, to avoid delays) and will need to provide the UTRN to the company registrar for the transfer to be registered. 
• Payment of the single tax can be deferred for up to 4 years, which can be extended for up to two further 4-year periods (i.e. 12 years in total) for certain transfers of shares for contingent, uncertain or unascertainable consideration. Deferment requests can be made online and will apply if the relevant criteria are met. 
• Establishing a system of reliefs and exemptions applying to the single tax, some of which will align with existing tax rules that apply although the £1,000 de minimis exemption that applies to Stamp Duty will no longer apply to the single tax. This means that the single tax will be chargeable even where the consideration for the transfer of UK shares (or a series of transfers of UK shares) is less than £1,000. 
• A full and enforceable compliance regime with percentage-based penalties for late notification. 

The UK government aims to introduce the single tax regime, the legislative framework and new online portal in 2027.

We will provide updates in light of further developments - if you have any questions on the new regime, please do get in touch. 

The deadline for submitting employment-related securities (ERS) annual returns to HMRC for the tax year ending 5 April 2025 is one month away, on 6 July 2025. This is a Sunday, so ideally companies should aim to submit their returns by Friday 4 July.

Returns filing is a compulsory requirement for companies who have issued shares/securities to UK employees and/or directors, who must ensure that they are registered with HMRC’s ERS online in order to submit such returns.

HMRC does not send filing reminders so now is the time to check if your company is on track with such requirements. 

The definition of employment-related securities is wide-reaching.  However, in brief, shares or other securities in an “employer” company that are acquired or held by or for employees or directors (both executive and non-executive) of that company will typically be employment-related securities.   

The employer and the person from whom the employment-related securities are acquired or issued (usually the same entity) must be registered with the ERS online service – agents cannot register schemes on a company’s behalf (although they can help with completing the return itself).

The registration requirements may vary depending on your company’s ERS scheme/arrangement – the categories are:

• “tax-advantaged scheme” (e.g. CSOP, SIP, SAYE or EMI); or 
• “non-tax-advantaged scheme and arrangement”, which includes non-tax-advantaged share schemes as well as any acquisitions of shares by employees or directors (even if there is no formal share scheme).  

To register a scheme through ERS online, the user will need a Government Gateway user ID and password; other details will need to be provided to complete registration, following which the company will receive a unique scheme reference number that is needed to file the annual return. There may be a delay of around 7 days between registration and receiving the unique scheme reference number, which should be factored in by companies ahead of the 6 July filing deadline. 

Following registration of the relevant scheme/arrangement, your company can then file the separate annual return for each “reportable event” relating to that scheme/arrangement. Even if there have been no reportable events, a filing must still be made to HMRC (known as a “nil return”).

It will depend on the type of scheme/arrangement in place, but generally “reportable” events include: 

• the grant or exercise of employee/director share options 
• acquisitions or disposals of shares/other securities held by or for employees or directors (which could be in the context of group re-organisations, share-for-share exchanges or company sales). 

There is an automatic £100 penalty for not submitting an ERS return by 6 July, and then £300 penalties if the return remains outstanding after three and six months. Penalties of £10 a day may be charged for returns that remain outstanding more than nine months after the deadline. 

Russell-Cooke can advise you on your ERS reporting obligations and, more generally, with setting up share option plans or issuing other types of employment-related securities. For further information, please contact Conor Brindley or Imanpreet Suthar.