Stamp Duty is charged on instruments that transfer stocks or marketable securities, and interests in partnerships if the partnership assets include stocks or marketable securities.
Stamp Duty Reserve Tax (SDRT) is a related tax and is charged on agreements to transfer chargeable securities.
For the transfers of exchange tokens to fall within the scope of Stamp Duty or SDRT, they would need to meet the definition of ‘stock or marketable securities’ or ‘chargeable securities’ respectively.
HMRC will consider this on a case-by-case basis, dependent on the characteristics and nature of the cryptoasset, rather than any labels attached to them.
Exchange tokens could be given as consideration for purchases of ‘stock or marketable securities’ and/or ‘chargeable securities’.
For SDRT it is defined as ‘money or money’s worth’:
For Stamp Duty, chargeable consideration is ‘money’, ‘stock or marketable securities’ or ‘debt’.
Broadly, ‘debt’ counts as chargeable consideration for Stamp Duty in the following scenarios:
- release of a debt – The seller has an outstanding debt to the purchaser (which could be in the form of exchange tokens). The seller transfers shares to the purchaser, and in consideration the purchaser releases the seller from the debt.
- debt is assumed – A third party has an outstanding debt to the purchaser (which could be in the form of exchange tokens). The seller transfers shares to the purchaser, and in consideration the seller is assigned the right to the debt from the third party.
Stamp Duty Land Tax (SDLT) is paid on the acquisition of land and buildings over a certain price in England and Northern Ireland.
Chargeable consideration for the purposes of SDLT comprises anything given for the transaction that is ‘money or money’s worth’. As a general rule, any non-monetary consideration should be valued at its market value on the effective date of the transaction.