Securities Transfer Tax: UK Draft Legislation Replaces Stamp Duty on Share Transfers from 2027

On 13 July 2026 the UK government published draft legislation for Securities Transfer Tax (STT) as part of Finance Bill 2026-27 — ending a seven-and-a-half-year review of how share and securities transfers are taxed. STT will replace the separate stamp duty and Stamp Duty Reserve Tax (SDRT) regimes with one digital, self-assessed charge.

The main rate stays at 0.5% of consideration, with a 1.5% rate continuing in limited circumstances. STT is expected to commence in 2027, with the exact date confirmed this autumn. Transitional arrangements run for four years where agreements pre-date commencement but stamp duty or SDRT falls due afterwards.

Under STT, transfers of shares and securities move to a comprehensive electronic system — removing non-electronic stock transfer forms and paper-based reporting. The buyer is primarily liable, though agents filing returns on behalf of buyers become jointly and severally liable 'accountable persons'.

Tax advisers have flagged that joint liability provisions may end the practice of agents submitting returns for clients unless the draft is amended during the technical consultation closing 7 September 2026.

Deferred contingent consideration falls within scope — STT is due even where amounts were wholly unascertainable at agreement, though payment can be deferred until the figure is known. This brings previously unquantifiable consideration newly into the charge.

Pinsent Masons notes that key reliefs from the current stamp taxes framework appear to carry across, but conditions need line-by-line comparison across the 106 pages of draft legislation. Groups undertaking demergers, share buybacks, or intra-group reorganisations should map existing reliefs against STT equivalents before 2027.

Four-year transitional rules protect transfers entered into before STT commencement where stamp duty or SDRT liability crystallises after the switchover date. M&A teams should document agreement dates and consideration structures now to preserve transitional treatment.

The reform aligns with wider Finance Bill 2026-27 administration changes — including HMRC's modernised information powers and correction notice regime published on the same Legislation Day.

Listed company transactions, private equity exits, employee share plan transfers, and venture capital secondaries all currently navigate stamp duty or SDRT. STT's digital self-assessment model shifts compliance from document stamping to return filing — similar to other HMRC digital taxes.

UK subsidiaries of multinational groups undertaking share capital reorganisations should brief treasury and legal teams on the buyer-liability model and agent accountability rules.

Irish groups with UK listings or UK share incentive plans face parallel stamp duty regimes — Irish stamp duty on share transfers remains separate, so cross-border equity restructuring needs dual-jurisdiction modelling.

Submit technical consultation responses by 7 September 2026 if agent liability or contingent consideration scope affects your transaction pipeline. Review the STT policy paper and draft clauses alongside existing stamp duty clearance practice.

Build STT into 2027 deal cost models — the 0.5% rate is unchanged but compliance mechanics and timing of payment may shift cash-flow assumptions on competitive auctions.

FinnAccountings helps UK and Irish businesses track corporate tax changes and transaction tax deadlines — start a free trial to keep equity deal compliance aligned as STT replaces stamp duty.