Stamp duty reserve tax (SDRT) is probably one of the least known taxes in the UK: in a recent survey by YouGov and Etoro, reported in The Times and elsewhere, 81% of Britons were unaware of it. However, SDRT is expected to bring in a staggering £3.8 billion for the Exchequer in 2019/20. By comparison, the widely known and criticised inheritance tax is only expected to bring in £5.1 billion in 2019/20. So what is SDRT and who pays it?
Well a lot of us are paying it without realising it. A cynic might describe it as an ideal tax. SDRT is a tax on the paperless electronic purchase of shares. It is charged at 0.5% of the value paid for the shares and any person or entity buying shares electronically is charged (subject to a few exceptions). So next time your pension pot buys shares, you may have just made a contribution to the Exchequer.
To find out more about how SDRT and other taxes may affect you, please get in touch with your usual BKL contact or use our enquiry form.