1.5 % SDRT/Stamp Duty - your opportunity to reclaim charges?

In March 2009 Advocate-General Mengozzi found that the 1.5% Stamp Duty Reserve Tax (SDRT) charge levied by the UK upon the issuance of new securities into a clearance service and upon the transfer of existing securities into a clearance service is contrary to EU law.

We believe this offers an opportunity to reclaim the SDRT paid. Businesses that have paid 1.5% SDRT or Stamp Duty in relation to clearance services, depository receipts or bearer securities should act now.

Given the very strong nature of the opinion – delivered in the case of HSBC Holdings plc and Vidacos Nominees Ltd v HM Revenue & Customs (HMRC) – we believe it is likely that the ECJ will rule in accordance with the Advocate-General.

Why should I act now?
If you are potentially affected by this decision and wish to pursue reclaims of SDRT incurred, we recommend that protective reclaims of SDRT are made now – the strength of the opinion suggests there is no reason to delay.

Having considered the wider implications of the Advocate-General’s opinion, we also believe it may be possible to reclaim the 1.5% SDRT paid on issues of new, or transfers of existing, UK securities to depositary receipt systems (typically American Depositary Receipts) and the 1.5% Stamp Duty paid on issues of UK bearer securities.

How can PwC help?
We can help by:

• Identifying potential reclaim opportunities for your business;
• Quantifying the SDRT and Stamp Duty reclaimable, including calculation of potential interest;
• Maximising the timeframe covered by claims submitted;
• Assisting with the reclaim mechanics and advising on the strategy, methodology and tactics for filing a reclaim with HMRC.

Contact details
Email: Alan Hall
Tel: +44(0)113 289 4498