Stamp duty – group litigation order
The High Court recently granted a group litigation order (GLO) to bring together actions for the recovery of potentially unlawfully levied 1.5% stamp duties charged on the issue and transfer of securities to depositary receipt users and clearance services.
This follows a landmark European Court of Justice decision last year which decided that the 1.5% Stamp Duty Reserve Tax (“SDRT”) charge was contrary to the Capital Duty Directive and the Free Movement of Capital. This decision created a significant opportunity for businesses to recover SDRT paid to HMRC in certain circumstances.
The GLO will test whether the European Court of Justice decision applies to SDRT charged on the issue and transfer of securities to depositary receipt users and clearance services for shares sold into foreign markets (outside Europe), such as the US through depository receipts.
The GLO will consist of current and former public companies which suffered 1.5% capital duty on the issue of shares into foreign markets dating as far back as 1987.