On 13 July 2026 — the same L-Day that dropped the Finance Bill 2026-27 draft package — HMRC published draft legislation and a policy paper for a new Securities Transfer Tax (STT). The intent is blunt: kill the dual stamp duty / Stamp Duty Reserve Tax (SDRT) mess and replace it with one self-assessed, digital tax on transfers of chargeable securities, aimed at go-live in 2027. Technical consultation closes 7 September 2026. An autumn update should pin the commencement date.
If you are a CFO, PE deal lead, company secretary or fund secondary buyer, do not file this under “admin simplification, no cash impact.” The 0.5% main rate and 1.5% higher rate for clearance / depositary receipt transfers stay. What changes is scope, charge timing, uncertain consideration, partnership interests, the £1,000 de minimis, registration gates, and who is jointly on the hook for payment. That is a controls and deal-process problem, not a tidy IT ticket.
Primary sources: the STT publication hub, the policy paper, the wider Finance Bill 2026-27 draft tax documents, and firm reads from Mayer Brown, Macfarlanes, Osborne Clarke and Proskauer (LP secondaries). Diary the comment deadline before legal goes quiet in August.
What STT is — in one page
Stamp duty taxes instruments; SDRT taxes agreements to transfer chargeable securities. The two overlap, cancel each other in places, and force dual analyses on the same economics. The July 2026 draft collapses them into one tax.
Under the draft:
- One tax replaces two — for transfers entered into on or after commencement, with up to four years of savings for pre-commencement deals still settling.
- Rates hold — main charge 0.5%; higher charge 1.5% into clearance / depositary receipt arrangements. Rounding to the nearest £5 dies; pay to the nearest penny.
- Buyer pays, on self-assessment — with an “accountable person” route that can create joint and several liability unless the agent took all reasonable steps to collect from the buyer.
- Digital first — CREST-style flows stay close to SDRT; off-market deals go through a new HMRC portal issuing a unique transaction reference number (UTRN) so registrars can write up without weeks of stamping lag.
- Scope tightens — UK-incorporated shares and equity-like debt, certain unit trusts and related rights. Ordinary LP interest transfers largely fall out, subject to anti-avoidance.
This is modernisation, not a rate cut. Budget the same 50bp / 150bp economics and redesign the process around charge timing, returns and relief claims.
Chargeable securities — in and out
The draft covers shares in UK-incorporated companies; equity-like debt in those companies (convertibles and similar — plain vanilla loan capital is out by design); units in non-excluded unit trusts; and interests in, rights to, and certain options over the above.
Direct transfers of ordinary shares in non-UK-incorporated companies should generally sit outside STT — even if the company is UK tax resident, and regardless of execution place or register location. Depositary interests over shares or equity-like debt in a non-UK company that is UK tax resident can still be in. Ordinary debt stays out. Transfers of shares by way of security get an express statutory exemption. Option/warrant grants fall out of scope; the “in contemplation of a sale” instrument charge ends.
Private M&A: when the charge arises
For electronic (CREST-style) deals, STT generally arises on the agreement or when conditions are satisfied — with a 14-day return and payment window.
For non-electronic private deals, the draft defers the charge until the later of agreement / conditions and substantial completion. Triggers include payment of all or substantially all consideration, the buyer starting to enjoy voting or economic benefits, receipt of dividends or other financial benefits, or an onward sale. Return and payment then sit on a 30-day clock.
That improves on stamp duty’s “instrument executed, clock running” culture — and creates a drafting risk. If your SPA lets the buyer vote, take dividends or treat itself as owner before cash hits, you may have accelerated STT whether or not completion accounts are done. Lock substantial completion into the tax paper and completion checklist.
Registration still gates on HMRC acknowledgement (or a no-return statement). UTRNs should speed write-up. Multi-step same-day transfers may still need a declaration-of-trust work-around — Macfarlanes flag this. Company secretarial and registrars need the playbook before 2027.
Uncertain consideration and earn-outs
Private equity lives on deferred, contingent and completion-accounts consideration. STT tries a single framework:
- If consideration cannot be determined when the charge arises, calculate STT on a reasonable estimate, then adjust when the figure clears.
- Where value depends on uncertain future events and is not reasonably expected to clear within six months, claim deferral on the uncertain element — initially up to four years, extendable to a 12-year long-stop.
- Once final consideration is known, amend the return and settle within 30 days.
Osborne Clarke’s point is sharp: the old “wait and see” for ascertainable-but-not-yet-ascertained consideration ends. You estimate, pay, and true-up. Earn-out caps no longer force “pay on the maximum” by default. Put estimate methodology, deferral ownership, true-up calendar and SPA who-pays language into the tax workstream template.
Reliefs and the dead £1,000 de minimis
Group relief, reconstruction / acquisition reliefs, new holdco insertion, growth-market exemption and intermediary relief are largely carried forward. Familiar is not identical — several exemptions must be claimed in an STT return.
- £1,000 de minimis gone — small off-market transfers, option exercises and EBT / employee share moves that previously escaped stamping now need a return (or a confirmed non-claim exemption). Volume equity plans feel this first.
- Accountable person liability — lawyers or brokers who file and pay can face joint and several exposure unless they took all reasonable steps to collect from the buyer. Update engagement letters before anyone casually offers to “handle stamping.”
PE and fund secondaries: partnership interests
This is the quiet win for GPs and secondaries houses. Under stamp duty, LP interest transfers could create technical UK exposure where the partnership held stock or marketable securities, or instruments touched the UK. Market practice answered with offshore execution protocols and elaborate risk allocation.
Draft STT flips the default: partnership interest transfers are generally out of scope, unless a targeted anti-avoidance rule applies — roughly, the partnership holds chargeable securities that became partnership property under arrangements with a main purpose of avoiding STT. Ordinary fund LP secondaries should stop needing the full stamp duty execution circus if the TAAR survives Finance Bill 2026-27.
Proskauer’s read is right: watch the final TAAR. If it holds, update LP transfer agreements, side letters and risk schedules in 2026. Jersey/Guernsey incorporated, UK-resident holdcos with plain vanilla debt stay broadly familiar: non-UK shares out; vanilla debt out; UK-incorporated equity still in.
CFO controls cut — lock before autumn
Consultation closes 7 September 2026. Commencement is aimed at 2027, with the exact date due this autumn.
- Inventory pipeline deals — SPAs, option exercises, EBT transfers, demergers, holdco insertions and LP secondaries that straddle commencement; map four-year transitional savings.
- Rewrite the private M&A tax schedule — substantial completion, estimate / deferral / true-up, UTRN / registration CPs, who files, who pays, accountable-person language.
- Kill the £1,000 assumption — share schemes, leaver purchases and small off-market moves need a volume process.
- LP secondary docs — strip obsolete offshore-execution theatre where the TAAR makes it redundant; keep anti-avoidance for structures parking UK chargeable securities in partnerships.
- Holdco maps — UK-incorporated vs merely UK-resident; refresh equity-like debt on convertibles and preferreds.
- Systems and authority — portal users, dual control on relief claims, registrar UTRN SLAs, CREST readiness, engagement-letter updates for external accountable persons.
- Respond or free-ride — multi-step same-day transfers, schemes of arrangement, high-volume employee equity? Comment by 7 September via the Stamp Taxes Policy team.
Bottom line
STT is not a giveaway and not a stealth rate rise. It collapses stamp duty and SDRT into one purchaser-side, self-assessed, digital tax at the same 0.5% / 1.5% price points — cleaner territorial scope, better private M&A timing, a modern uncertain-consideration engine, and a partnership default that matches how fund secondaries actually run. The traps are process: de minimis abolition, claim-not-assume reliefs, substantial completion drafting, estimate true-ups, accountable-person liability, and any TAAR surprise on partnerships.
Read the draft package, the ten-point Mayer Brown cut, Macfarlanes, Osborne Clarke, and Proskauer on LP secondaries. Then put a named owner on SPA templates, share-scheme admin and secondary transfer packs before the autumn commencement announcement — not the week the portal goes live in 2027.
Mark Hendy is a PE-facing CFO and tax adviser at Tanous Limited. This is practical commentary, not formal advice on your facts.