Stamp taxes on recognised growth markets
Stamp taxes on purchases of securities from recognised growth markets have been abolished from 28 April 2014. There uses to be a 0.5% stamp duty or stamp duty reserve tax charge.
The exemption applies to securities that are admitted to trading on a recognised growth market and not ‘listed’ on a recognised stock exchange. Eligible securities qualify for the exemption wherever they are traded and will be designated as exempt for stamp duty reserve tax in CREST at a static data level.
To qualify as a recognised growth market, a market must be a recognised stock exchange and meet one of two specified conditions:
- A majority of companies trading on that market are companies with market capitalisations of less than £170m in the qualifying period.
- The market’s rules require that companies seeking admission demonstrate at least 20% compounded annual growth in revenue or employment over the three years preceding admission.
Applications for approval of ‘recognised growth market’ status should be submitted to HMRC. A list of recognised growth markets is available on HMRC’s website. The exemption is designed to boost equity investment into growth markets.