Stamp duty and SDRT implications of a rights issue

Copyright © 2025 LexisNexis
Published by a LexisNexis Tax expert
Practice notes

Stamp duty and SDRT implications of a rights issue

Copyright © 2025 LexisNexis

Published by a LexisNexis Tax expert

Practice notes
imgtext

This Practice Note explains the key Stamp duty and Stamp Duty Reserve Tax (SDRT) implications of a rights issue; in particular, the stamp duty and/or SDRT consequences of the issue of Nil paid rights, the transfer or renunciation of those rights, the lapse of those rights and the issue of the new Shares.

This Practice Note is drafted on the assumption that the securities being issued under the rights issue are shares.

However, this Practice Note is not relevant to unlisted shares that are admitted to trading on a recognised growth market such as AIM—this is because such shares are in any event exempt from stamp duty and SDRT. For more information on this exemption, see Practice Note: Growth market exemption from stamp duty and SDRT.

Broadly, a rights issue is an offer of new shares at a discount to existing shareholders in respect of, and in proportion to, their existing shareholdings. For more information on what a rights issue is, see Practice Notes: What is a rights issue and key concepts for

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Stamp duty definition
What does Stamp duty mean?

A transfer tax payable on documents and instruments, rather than in respect of a transaction. It is most commonly encountered on the transfer of UK certificated shares, where the stock transfer form is the instrument that is stamped.

Read more readmore

Popular documents

Tax consequences of share buybacks—main rules

Tax consequences of share buybacks—main rulesA limited company is permitted to buy back shares that it has in issue, provided certain conditions set out in the Companies Act 2006 (CA 2006) are met. This is known as a share buyback or a ‘purchase of own shares’. In addition to the CA 2006 conditions,

Tax consequences of share buybacks—calculating the income capital split

Tax consequences of share buybacks—calculating the income capital splitFrom a shareholder’s perspective, when a company buys back its own shares, either directly or through an intermediary acting as agent for the company (whether on- or off-market), the purchase normally involves two elements for

Micklefield clauses

Micklefield clausesWhat is a Micklefield clause?It is common for employee share plans to provide that, on termination of employment (or when an employee is given or receives notice of termination of employment), subsisting share awards will be forfeited and subsisting share options will lapse.It is

Financial clean break orders in family proceedings

Financial clean break orders in family proceedingsDuty of the court to consider a clean breakAlthough there is no presumption in favour of there being a financial clean break between parties on divorce, the court is under a duty to consider whether it would be appropriate to exercise its powers so