______Abolition of and stamp duty reserve : securities admitted to trading on recognised growth markets ______

Guidance 17 March 2014

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Contents

Introduction

Chapter 1 Overview

Chapter 2 Guidance

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Introduction

The Government is planning to abolish stamp on purchases of shares that are admitted to trading on recognised growth markets.

Draft legislation was published on 10 December 2013. The consultation closed 4 February 2014. All the feedback was carefully considered and as a result the only change to the draft legislation will be minor formatting.

This revised guidance supersedes the guidance in ‘Relief from stamp duty and stamp duty reserve tax: securities traded on recognised growth markets’ which was published on 10 December 2013.

Anne Berriman HM Revenue & Area 3C/20 100 Parliament Street London SW1A 2BQ

Tel: +44 (0)3000 585901 Email: [email protected]

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Chapter 1

Overview

At Budget 2013, the Government announced that it would abolish stamp taxes on purchases of shares admitted to trading on growth markets such as AIM. The proposed exemption has been set out in draft legislation Finance Bill 2014: draft legislation published.

Further updates will be placed on the Stamp Taxes pages of the HMRC website.

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Chapter 2

Guidance

General

The Government’s objective is to boost investor participation in equity growth markets and improve the conditions for growing companies to raise equity finance.

The exemption is scheduled to come into effect on 28 April 2014.

Eligible securities

The exemption applies to securities that are admitted to trading on a recognised growth market and not ‘listed’ on a recognised stock exchange for example, . ‘Listed’ is defined in legislation at s1005(3)-(5) Income Tax Act 2007. HMRC will maintain a list of recognised growth markets on its website.

Find lists of recognised stock exchanges HM Revenue & Customs: Recognised Stock Exchanges. Tables 1 and 2 show which exchanges are recognised stock exchanges.

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.

It’s possible that you purchased eligible securities, but were charged stamp taxes, for instance between a security becoming eligible for the exemption and the CREST settlement system being updated. If you purchased eligible securities and tax was charged incorrectly, you can apply to the Birmingham Stamp Office for a refund. There’s guidance on how to do this and about getting a Stamp Duty Reserve on the HMRC website.

Recognised Growth Markets

To qualify as a recognised growth market, a market must be a recognised stock exchange (HM Revenue & Customs: Recognised Stock Exchanges) and meet one of two 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 ‘recognised growth market’ status can be made to HMRC at the address below. The request needs to be in writing and attach evidence demonstrating that one of the two conditions is met. If a market would like approval from 28 April 2014, the application should be submitted to HMRC by end of March 2014.

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Chris Taylor HM Revenue and Customs Stamp Taxes Office City Centre House 30 Union Street Birmingham B2 4AR

If you have any further enquiries, please email; [email protected].

Overseas growth markets can apply for recognition if they meet the relevant conditions.

HMRC will process your application as quickly as possible and will contact you if any further detail is required. If your application is accepted, HMRC will issue a letter of approval. HMRC will also publish and maintain a list of recognised growth markets on their website.

Once approved, the market should contact Euroclear to ensure that the CREST settlement system is updated. Euroclear’s email address is [email protected].

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