Stamp taxes on shares - Securitisations and insurance-linked securities

The measure

It was announced that Finance Bill 2021/22 will introduce a power enabling HM Treasury, by secondary legislation, to make stamp duty and stamp duty reserve tax (SDRT) changes in relation to securitisations. Such changes would include those to enable the transfer of notes issued by securitisation companies and of securities to or by securitisation companies to be exempted if otherwise chargeable to stamp duty or SDRT. The measure will introduce similar powers in relation to insurance-linked securities (ILS).


Who will be affected?

This measure is relevant to: 

  • Companies involved in carrying out securitisations on the capital markets or in the issue of ILS; and
  • Investors in notes issued as part of securitisation arrangements or in ILS.


When will the measure come into effect?

The measure will have effect from Royal Assent to Finance Bill 2021/22, although practical effect will depend on when and how HM Treasury exercise the power in due course.

Our view

The transfer of loan capital is generally exempt from stamp duty and SDRT under the ‘loan capital exemption’. This measure is being introduced mainly to enable the government to address concerns that the application of the stamp duty loan capital exemption to notes issued by securitisation vehicles may be uncertain. Securitisations are an important part of the UK’s capital markets and an important source of finance for UK businesses. This measure could help to ensure that the UK’s tax code can keep pace with the evolving nature of the capital markets and contribute to maintaining the UK’s position as a leading financial services centre, but of course the practical effect will depend on when and how HM Treasury exercise the power in due course.