Paying Stamp Duty Reserve Tax: use the correct reference and meet the seventh-day deadline for off-market notices

Stamp Duty Reserve Tax is generally charged on agreements to transfer chargeable securities for consideration, often at 0.5 percent. CREST normally calculates and collects SDRT automatically for transactions settled through the system, while certain off-market or exceptional transactions require the taxpayer to notify HMRC and pay electronically using the reference supplied on the notice.

The standard SDRT rate is generally 0.5 percent

HMRC's current rates show the standard SDRT charge at 0.5 percent of the consideration for an agreement to transfer chargeable securities, subject to exemptions and special higher-rate situations such as some transfers into depositary-receipt or clearance systems.

Do not apply the rate mechanically to every share transaction. Reliefs, CREST treatment and the nature of the security can change the liability, so the transaction should be reviewed before treasury receives the payment instruction.

CREST normally handles SDRT automatically

For many UK securities transactions settled through CREST, the system calculates SDRT and collects it through the participant's settlement arrangements. The company or investor therefore does not make a separate manual HMRC bank transfer for each ordinary CREST transaction.

Manual payment becomes relevant where the payment could not be made through CREST or HMRC requires an off-market notice and direct settlement.

Off-market notice and payment can be due by the seventh day

HMRC's payment guidance says that where the payment could not be made through CREST, the deadline for both payment and notice is the seventh day of the month after the calendar month in which the agreement took place.

If that deadline falls on a weekend or bank holiday, the money should reach HMRC by the end of the previous working day. Put the date on the transaction closing checklist rather than relying on the securities team to remember it later.

Use the reference supplied on the off-market payment notice

HMRC updated its SDRT payment guidance in September 2026 to emphasise that using the wrong reference can delay allocation or cause the money to be used against another tax liability.

Finance should copy the exact reference from the notice into the bank approval and preserve the notice with the transaction file.

Faster Payments and CHAPS are quicker than Bacs

HMRC says Faster Payments and CHAPS can reach it the same or next working day, while Bacs requires about three working days. The business should check its own bank cut-offs and transaction limits before the deadline.

Payments must be made in sterling. Overseas payers should factor bank and FX timing into the schedule rather than send another currency and hope the receiving bank converts correctly.

Tie tax payment to the securities transaction

Keep the agreement, consideration, SDRT calculation, exemption analysis where relevant, notice, payment reference and bank confirmation together.

Where advisers or brokers handle the transaction, obtain evidence that SDRT was actually settled rather than assuming completion meant every tax payment occurred automatically.

Worked example: a company agrees an off-market purchase of UK shares for £2 million and the transaction is not settled through CREST. If the standard 0.5 percent SDRT rate applies, the tax is £10,000. The notice and payment are generally due by the seventh day of the following month under HMRC's off-market payment process.

Use one person to calculate the tax and another to verify the bank reference. Share transactions can involve large purchase prices but relatively small tax transfers, which makes an incorrect reference easy to overlook inside the wider deal.

Keep Stamp Duty and SDRT distinct. They interact, but they are not identical taxes and can arise through different mechanisms depending on how the securities agreement and transfer are completed.

Use a transaction tax checklist before funds flow. The share purchase consideration, SDRT amount, CREST status, payment reference and adviser responsibility should all be agreed before completion so tax is not discovered after the securities settlement.

Worked example: an off-market agreement is signed on 20 October for £4 million of chargeable securities and CREST does not collect the tax. If the standard 0.5 percent rate applies, SDRT is £20,000 and both the notice and payment are generally due by 7 November, adjusted to the previous working day if necessary.

Keep the HMRC payment reference distinct from the stock-transfer or transaction reference used by lawyers and brokers. All can appear on the same deal file but only the HMRC reference allocates the tax payment correctly.

After payment, confirm allocation before closing the deal file. A successful bank transfer with an incorrect reference can leave HMRC showing the tax unpaid even though treasury believes the transaction is complete.