UK Stamp Duty Reserve Tax (SDRT)
Customers will be able to choose either the 0.5% SDRT regime or the 1.5% SDRT regime for the clearing and settlement of securities for each of their accounts with CBL.
Note: Bridge transactions (that is, between a CBL customer and a counterparty in Euroclear Bank) are not allowed.
In order to operate the two SDRT regimes, CBL will maintain two separate accounts in CREST. If a customer wants to clear and settle transactions under both SDRT regimes, two separate accounts with CBL will be required. Internal transfers from a customer’s account under one SDRT regime to an account of the same customer or another customer under the other SDRT regime will not be possible.
Customer accounts will be subject to the 0.5% SDRT or 1.5% SDRT regimes depending on the documentation submitted when opening an account in CBL. A request for application of the appropriate regime (see Forms for use in the UK Equities, corporate bonds and investment trusts market) will have to be completed accordingly.
Customers who want to change the status of existing accounts from the originally defaulted 1.5% SDRT regime to the 0.5% SDRT regime must also complete a Request for Application of the 0.5% SDRT Regime. CSP and DRS account operators are always subject to 1.5% SDRT.
Given the two different SDRT regimes under which UK chargeable securities can be held through Clearstream Banking, customers are requested to verify the status of their account with Clearstream Banking for SDRT purposes before transferring UK chargeable securities to Clearstream Banking.
Customers should note that a refund of 1.5% SDRT cannot be claimed when securities were received in error on an account subject to 1.5% SDRT unless a valid exemption reason applies (for example, new issue or a transfer of securities between two CSP accounts, between two DRS account operators or between a CSP account and a DRS account operator). Furthermore, no exemption from 1.5% SDRT can be claimed on the basis of no change of beneficial owner.
Note: If no trade amount is included in the settlement transaction, SDRT will be calculated by CREST based on the offer price, provided by their service provider FTI, on the trade date of the transaction. If the amount of SDRT due cannot be calculated because no price is available, CREST will not apply any SDRT. Customers are therefore recommended to supply a price in all instructions.
For details of the requirements of and the services offered under the two regimes, please consult the attached document.