Securities Transfer Tax: what replaces stamp duty on shares

The Securities Transfer Tax will replace Stamp Duty and Stamp Duty Reserve Tax (SDRT) on shares and other securities with a single tax. HMRC says it will be a modern, digital, self-assessed tax introduced in late 2027. Budget 2026 confirmed the plan and published the tax information and impact note that sets out how it will work.

What the Securities Transfer Tax is

Today, shares are charged under two interdependent taxes: Stamp Duty and SDRT. HMRC calls them together the Stamp Taxes on Shares.

The STT is one self-assessed tax on the transfer of securities. It fully digitises reporting and payment, which removes paper-based processes. The measure also clarifies how a small number of pre-2003 land transactions in the Stamp Duty regime are treated.

When it starts

HMRC says the single tax, its legislative framework and the portal will be introduced in late 2027. It will give an update on the commencement date this autumn. A commencement order will bring the tax into force.

Legislation will be in Finance Bill 2026-27 to allow commencement in 2027. Stamp Duty and SDRT will stop applying to transfers of securities entered into on or after the commencement date.

The four-year transition

Transfers entered into before the start date, where tax is not yet reportable or payable, stay under the old rules. Savings provisions apply for four years from commencement, so taxpayers have time to complete existing transactions.

For practices, that means two systems will run side by side for a while. A transaction agreed in 2027 under the old rules could still be reported under Stamp Duty or SDRT afterwards.

Who is affected

HMRC lists individual investors, financial institutions, brokers, intermediaries, registrars and other market participants. The note gives these volumes:

Individuals who buy and sell UK securities off market, and who report and pay themselves rather than using an agent, will need to learn the new rules and register.

What it costs the Exchequer

The Budget costings show a small loss of revenue from simplification.

These figures are set out in Table 6.1 of the Budget and have been certified by the Office for Budget Responsibility. The final costing will be set out at a future fiscal event.

How it fits with the wider reform

The STT is the last stage of a long modernisation project. HMRC consulted from 2018, ran an industry working group of 32 members between 2021 and 2022 and held a formal consultation in 2023. A summary of responses confirming the single tax was published on 28 April 2025. A summary of responses on the higher 1.5% rate was published on 13 July 2026.

The Treasury’s Corporate Tax Simplification document also cites the new tax as part of its reform programme. See our summary of the Corporate Tax Simplification consultation.

What advisers should do

1. Identify clients who buy or sell shares off market. They are the group HMRC says must learn the new rules and register if they self-report.
2. Note the old rules continue for transactions entered into before commencement.
3. Watch for the commencement date that HMRC has promised this autumn.
4. Prepare for registration. Self-reporting individuals will need access to the portal.

For investors more broadly, see Budget 2026 for investors.

Frequently asked questions

What is the Securities Transfer Tax?

It is a single, self-assessed digital tax on transfers of securities that will replace Stamp Duty and Stamp Duty Reserve Tax.

When will the Securities Transfer Tax start?

HMRC says late 2027. A commencement order will set the exact date, and an update is due this autumn.

Does the Securities Transfer Tax change the tax rate?

The note says the measure modernises and simplifies the framework. Rates were consulted on separately. A summary of responses on the higher 1.5% rate was published on 13 July 2026.

What happens to transactions agreed before the start date?

They remain subject to Stamp Duty or SDRT. Savings provisions apply for four years from commencement.