Stamp duty is paid on which transactions?

• A. Stamp duty is paid on UK share trades when a stock transfer form is used.
• B. Stamp duty reserve tax is payable when shares are purchased electronically.
• C. No stamp duty payable on purchases of foreign shares, bonds, OEICs, unit trusts and ETFs.
• D. Stamp duty land tax is only for land purchases.

Answer: (A)

Stamp duty in the UK applies to share transfers only when the transfer is documented on paper using a stock transfer form. The duty is triggered by the physical instrument, typically at 0.5% of the consideration. When purchases are made electronically, the tax liability is Stamp Duty Reserve Tax (SDRT) instead of stamp duty, so stamp duty isn’t paid in those cases. This is why the statement about stamp duty being paid on UK share trades when a stock transfer form is used is the correct description. Other options point to SDRT for electronic purchases, or to stamp duty being irrelevant for foreign shares and funds, or to Stamp Duty Land Tax (a separate tax for land).