Stamp duty on shares

Stamp duty on shares is a tax of 0.5% of the purchase price, charged when you buy most UK shares and not when you sell them¹. Buy £100 of shares and the stamp duty is 50p². In practice you rarely see it as a separate bill: when you buy shares through a broker or investment platform, the 0.5% is added to the cost of the deal and shown on your contract note.

There are two versions of the tax, and which one applies to you depends on how the purchase happens. Stamp Duty Reserve Tax (SDRT) is charged at 0.5% on the paperless purchase of shares, which covers almost every trade a private investor makes through an online account¹. Stamp Duty, the paper version, is paid on shares bought using a stock transfer form, for example when shares are gifted or transferred outside the market³. The rate is the same either way: 0.5%¹.

The tax is small compared with the cost of moving house, but it is a real drag on frequent trading. Someone who turns over their portfolio repeatedly pays 0.5% each time they buy back in, which is one reason long-term holders and funds that escape the charge can have an edge on costs. This page explains when the charge applies, which purchases avoid it, how to pay HMRC when a paper transfer is involved, and how the tax differs from the stamp duty charged on property.

Stamp duty on shares: 0.5% of the purchase price

The headline rate is simple: 0.5% of what you pay for the shares. HMRC's published rates and allowances confirm both the paper duty and Stamp Duty Reserve Tax sit at 0.5%, with the paper duty rounded up to the next £5¹. That rounding matters only for transfers done on a stock transfer form, where the amounts can be small or hard to value precisely; for ordinary electronic trades the 0.5% is simply calculated on the deal value.

The Association of Investment Companies gives the same figure for shares in UK-based investment trusts: 0.5% of the purchase amount². So whether you buy a FTSE 100 company, a smaller listed firm or an investment trust, the buying cost includes this 0.5%. On a £100 purchase the duty is 50p²; scale that up and a £10,000 purchase carries £50.

One corner of the rules worth knowing: stamp duty also applies to call option premiums, charged at 0.5% of the consideration given for the premium¹. Most private investors will never touch this, but it shows the tax follows the payment for the right to acquire shares, not just completed purchases.

You pay it when you buy, not when you sell

The charge is one-way. It is paid only when you buy, not when you sell². Sell £5,000 of shares and there is no stamp duty on the sale proceeds; the exit costs are your broker's dealing charges and, potentially, capital gains tax on any profit.

There is one common transaction where the "buy" side catches people out: the bed and ISA move, where you sell shares in a general account and repurchase them inside a stocks and shares ISA to shelter future gains. Which? notes that this involves paying stamp duty of 0.5% on the sale of any shares, because the repurchase inside the ISA is a fresh purchase⁶. The ISA wrapper protects investments from income tax and capital gains tax, but it does not remove the buying charge: stocks and shares Isas do not shield your investments from stamp duty when buying shares⁷.

The duty you pay is not simply lost, though. When you eventually sell and calculate a capital gains tax liability, the stamp duty you paid when buying, along with stockbroker fees paid on buying and selling, can be deducted from the gain⁸. Keep your contract notes: they are the evidence of what you paid.

Where stamp duty does not apply: AIM shares, funds and ETFs

Not every investment purchase carries the 0.5%. The main exemptions a UK investor meets are:

• Shares in non-UK investment companies. Because these companies are not based in the UK, investors do not have to pay stamp duty when they buy their shares⁹.
• Open-ended funds. Buying units in an OEIC or unit trust is not a transfer of shares in the same way, so the 0.5% does not apply to the purchase in the way it does to share deals.
• Newly listed companies. From 27 November 2025, there is a relief from the 0.5% Stamp Duty Reserve Tax charge on agreements to transfer securities of a company newly listed on a UK regulated market, for a three-year period from listing⁴.

The relief for new listings is time-limited: after the three-year window, purchases of those shares are charged in the usual way⁴. The exemption for non-UK companies is structural and permanent, and it is one reason some investment companies are domiciled outside the UK⁹.

A point that surprises many investors: performance figures for investment trusts do not include stamp duty, because it is a cost paid by the investor outside the trust itself, along with dealing fees, rather than a cost inside the vehicle¹⁰. When you compare a trust's published returns with a fund's, remember your own buying cost of 0.5% sits on top for the trust but not for the fund purchase.

Stamp duty on shares bought on a stock transfer form

Most share purchases happen electronically and the tax is handled without you doing anything. But when shares change hands on paper, using a stock transfer form, the buyer is responsible for the tax and the paperwork. Stamp Duty is paid on shares bought on a stock transfer form³, and it is a separate tax from both Stamp Duty Reserve Tax, paid on paperless purchases, and Stamp Duty Land Tax, paid when property is bought or transferred³.

Stock transfer forms come up in situations like a family share transfer, a gift, or shares passed to someone under a will. The old system of physically stamping the document is gone: the previous physical stamping system has been permanently withdrawn¹¹. What replaces it is an administrative process where you pay the duty, send HMRC the form, and HMRC processes it.

The order of operations matters. The Stamp Duty must be paid before HMRC can process the stock transfer form¹¹. Until that happens, the transfer cannot be completed, which can hold up registration of the shares in the new owner's name. HMRC will accept e-signatures on the form³, so a wet-ink signature is not required, but the 30-day clock and the payment obligation are unchanged.

How to pay HMRC: 30 days from signing

The deadline for paying Stamp Duty and getting stock transfer documents to HMRC is no later than 30 days after they have been dated and signed³. The same 30-day limit applies to sending the form: it must reach HMRC within 30 days of it being signed and dated¹¹. In other words, both the payment and the submission sit inside the same 30-day window.

Payment is electronic. HMRC's instruction is blunt: do not post a cheque payment³. Where electronic payment is not possible, HMRC is the point of contact³. All payments must be made in pound sterling, and a bank may charge for payments in any other currency³. When paying, a payment reference is used, made up of the payer's name and the payment amount, for example JBrown240.00³.

Timing the payment is part of meeting the deadline. If you pay by Bacs, allow 3 working days for the payment to reach HMRC³. And if the 30th day falls at an awkward moment, HMRC's general rule across its payment deadlines is that where the deadline falls on a weekend or bank holiday, the payment must reach HMRC on the last working day before it, unless you are paying by Faster Payments¹². A Bacs payment started too close to the deadline can therefore arrive late even if you acted in good time.

Late payment: penalties and interest

Miss the 30-day deadline and the consequences follow HMRC's general approach to late tax. Interest is charged if you pay after the deadline¹². On top of interest, penalties can build up in stages.

HMRC's late payment penalty framework, as it applies from the 2025-26 tax year onwards, charges a penalty of 2% of the tax owed at day 15, rising to 3% of the tax owed at day 15 for payments 16 to 30 days late¹³. Which? reports the same structure under the new penalty system coming for late tax returns¹⁴. Beyond that, the established pattern for late tax bills is a penalty of 5% of the tax unpaid at 30 days, 6 months and 12 months, plus interest on the amount owed¹⁵, and a further 5% after six months in the schedule of escalating charges¹⁶. Business Debtline's guidance on income tax debts describes the same 5% penalties at 6 months and beyond, including a late filing penalty of £300 or 5% of the tax due, whichever is higher, for returns at least 6 months late¹⁷.

These figures come from HMRC's rules for income tax and Self Assessment rather than a stamp-duty-specific penalty table, but they show how HMRC treats unpaid tax generally: interest first, then percentage penalties that grow the longer the debt stands. TaxAid makes the same point about payments on account: interest is charged if these are not paid on time¹⁸.

If paying on time is genuinely impossible, the practical step is to contact HMRC before the deadline rather than after. HMRC's payment plan rules allow a Time to Pay arrangement in some circumstances, though eligibility conditions apply, including being within 60 days of the payment deadline and having no other payment plans or debts with HMRC¹⁹.

The PTM levy: £1.50 on trades over £10,000

The PTM levy is a separate, flat charge that sits alongside stamp duty on larger share deals. It is not a tax in the same sense: it is a levy collected on trades in UK shares above the £10,000 threshold, at £1.50 per trade, and it appears on your contract note alongside the 0.5% stamp duty rather than being paid to HMRC separately.

For most investors it is a rounding error: £1.50 on a trade of any size above the threshold, whether the deal is £10,001 or £100,000. But it is worth knowing it exists, because it is charged per trade rather than as a percentage, so splitting a large order into several smaller deals would multiply the levy. Like stamp duty, it is a cost of buying UK shares that does not apply to the purchase of funds, and it is another line item to check when you read a contract note.

Buying Irish shares and shares in other countries

Shares listed outside the UK sit outside the UK stamp duty net, but many countries run their own equivalent taxes, and your broker will usually deduct them at the point of dealing.

• Irish shares. Irish stamp duty applies at 1% on purchases of Irish-listed shares. That is double the UK rate, and it is deducted from the proceeds of the trade by the broker.
• French shares. France operates a financial transactions tax charged at 0.4% on certain French shares, so check with your broker before dealing².

The existence of these charges is one of the small differences between buying overseas shares and buying at home. The UK's 0.5% is not the ceiling: Ireland charges more, France charges less. None of these foreign taxes is recoverable through a UK ISA, in the same way that UK stamp duty is not removed by holding investments inside an ISA⁷. If you trade across borders regularly, the dealing charges, currency conversion costs and local transaction taxes all belong in the comparison, not just the headline price of the share.

Stamp duty on shares is not stamp duty on a house

The name is shared, the taxes are not. Stamp Duty Land Tax is paid when property is bought or transferred in the UK²⁰, and it works completely differently from the share taxes:

The property tax is far larger. In England and Northern Ireland, stamp duty applies on properties from £125,000²¹, first-time buyers pay nothing on the first £300,000²¹, and a buyer of a house at the average UK house price of £292,000 would face a bill of £4,600, or zero as a first-time buyer, or £19,200 if it is an additional property such as a buy to let²¹. Which? research on moving costs found stamp duty made up 6% of home movers' costs, and that for buyers in England and Northern Ireland purchasing a property over £125,000, stamp duty costs rose by £2,500 following the threshold changes²².

Scotland and Wales run their own property transaction taxes entirely, with their own rates, returns and penalty regimes, so the property side of the comparison depends on where in the UK you buy²³. None of that touches shares: the 0.5% on share purchases is the same wherever in the UK you live, because it is a UK tax on the transfer of securities rather than a tax on land.

For help with any of these taxes, MoneyHelper and TaxAid offer free guidance, and HMRC's own pages on paying stamp duty cover the practical steps for stock transfer forms³.