Stamp Duty Reserve Tax Newsletter
HMRC have published the July 2009 Stamp Duty Reserve Tax (SDRT) newsletter. This edition contains updated guidance on Collective Investment Schemes.
The newsletter announces two changes in HMRC’s position as regards the tax treatment of ‘net dealing’. This takes place where investors in collective investment schemes make investments through an intermediary. Net dealing is the process whereby intermediaries net off buy and sell instructions for each fund and send only one net buy or sell instruction to each underlying fund manager.
The two changes are as follows:
With effect from 14 July 2009, underlying fund managers should only include transactions in their Schedule 19 calculations for which they have received instructions.
HMRC have also changed their previous position that net dealing would not generally give rise to any principal SDRT charges under section 87 Finance Act 1986. With effect from 27 July 2009 net dealing will generally give rise to two principal SDRT charges in respect of the transactions which have been netted off – one on the intermediary and one on the ultimate purchaser of the investment.
HMRC will not seek to challenge any reasonable transitional arrangements for taxpayers to adjust to the changes in the period to 22 September 2009. However action will be taken where taxpayers seek to minimise tax liabilities artificially.