Category: Tax Compliance

Stamp duty on shares is finally going digital — on 13 July 2026 HMRC published draft legislation for a new Securities Transfer Tax (STT), a single, self-assessed, fully digital tax that will replace both stamp duty and stamp duty reserve tax (SDRT) on transfers of securities, targeted for introduction in 2027. As chartered certified accountants in Surrey advising companies and shareholders across the UK, TaxDigit explains what the new regime means for share sales, company purchases and group reorganisations, and what to do before the rules change.

What Is the Securities Transfer Tax — and Why It Matters

Today, tax on share transfers is split between two regimes: stamp duty, a document-based charge dating back to 1891 that still requires stock transfer forms to be sent to HMRC for stamping, and SDRT, which applies to paperless transactions settled electronically through CREST. Running two parallel systems for what is economically the same transaction creates duplication, delay and confusion — a company registrar cannot lawfully write up the register of members until a stamped instrument comes back from HMRC, which can hold up completions for weeks.

The Securities Transfer Tax sweeps both regimes away. Under HMRC’s policy paper Modernisation of the Stamp Taxes on Shares framework — Securities Transfer Tax, published with draft legislation on 13 July 2026, a single self-assessed tax will apply to transfers of securities, reported and paid through a new online portal. There will be no more physical stamping and no more paper-based reporting or payment.

What Changes From 2027

The government is aiming to introduce the STT and its legislative framework in 2027, with an update on the exact commencement date due in autumn 2026. The key features of the new regime are:

• One tax, one portal — a single self-assessed charge replaces stamp duty and SDRT, reported and paid digitally; CREST will continue to handle transactions settled electronically.
• The purchaser is liable — but an agent (such as your accountant or solicitor) can act as the “accountable person” and deal with reporting and payment.
• Faster completions — a unique taxpayer reference number (UTRN) is generated immediately on submission of the return, and the registrar can write up the register of members as soon as the UTRN is received, rather than waiting for HMRC to stamp a document.
• Clear payment deadlines — 30 days for off-market transfers, 14 days for transactions in electronic settlement systems, running from the earlier of substantial performance or completion.
• Reliefs retained and self-assessed — stamp duty group relief, reconstruction and acquisition reliefs, the growth-market exemption and intermediary relief all carry over, claimed through the portal without waiting for HMRC adjudication.

The Transitional Rule

The draft legislation provides a four-year transitional period for transactions entered into before the commencement date of the new rules. In practice this means agreements signed under the old regime — conditional share purchase agreements, options and deferred completions among them — will need to be tracked carefully across the boundary, because the tax treatment of a deal signed in 2026 but completed after commencement will depend on the transitional provisions. Anyone negotiating a share sale or reorganisation now should consider how the change of regime affects timing.

Who Benefits — and Who Should Still Pay Attention

Buyers of private companies gain the most: no more sending stock transfer forms for stamping, no more weeks-long delays before the share register can be updated, and a clear digital process with an immediate UTRN. Groups undertaking reorganisations keep group relief and reconstruction relief, but these become self-assessed — the burden of getting the analysis right shifts squarely onto the taxpayer and their adviser, with a full compliance regime behind it. Trustees, partnerships and investors holding unlisted shares should also note that transfers of partnership interests are expected to move out of scope entirely under the new framework.

What Companies and Shareholders Should Do Now

• Review any share purchase agreements, options or conditional deals that may straddle the 2027 commencement date and map them against the four-year transitional rules.
• Factor the new 30-day and 14-day payment windows into completion timetables and funds-flow planning.
• Check whether group reorganisations planned for 2027 onwards would be better accelerated or deferred once the commencement date is confirmed in autumn 2026.
• Decide who will act as the accountable person for future transfers — the portal allows your accountant to take on the reporting and payment obligation.
• Respond to the technical consultation, which closes on 7 September 2026, if the draft rules create issues for your transactions.

Frequently Asked Questions

What is the Securities Transfer Tax?

The Securities Transfer Tax (STT) is a proposed single, self-assessed, fully digital UK tax on transfers of securities. It will replace both stamp duty and stamp duty reserve tax, with reporting and payment handled through a new HMRC online portal.

When does the STT start?

The government is targeting introduction in 2027, with an update on the commencement date expected in autumn 2026. Draft legislation was published on 13 July 2026 and is open for technical consultation until 7 September 2026.

Will stamp duty group relief still exist?

Yes. Group relief, reconstruction and acquisition reliefs, the growth-market exemption and intermediary relief are all retained under the new regime, but they will be self-assessed through the portal rather than adjudicated by HMRC in advance.

Do I still need to send documents to HMRC for stamping?

Under the current rules, yes — stock transfer forms for off-market share purchases must still be submitted to HMRC with stamp duty paid within 30 days. Once the STT commences, physical stamping disappears entirely and everything is done digitally.

How TaxDigit Can Help

TaxDigit advises on the tax consequences of company share sales and purchases, group reorganisations and shareholder exits, alongside tax advisory and planning and year-end accounts support. We can review deals that straddle the 2027 changeover, act as your accountable person under the new regime, and structure transactions to preserve group and reconstruction reliefs. The full policy paper and draft legislation are on gov.uk.

Plan Ahead With TaxDigit

If you are buying or selling a company, restructuring a group or holding a deal that may complete after 2027, speak to us before the rules change. Call 01483 230 777, email info@taxdigit.co.uk or book a consultation with our team in Guildford, Surrey.

Holiday-let owners have a new way into business rates — from 24 July 2026, self-catering accommodation that forms part of a wider business, or that sits within a complex of five or more units, no longer has to satisfy the 70-day actual-letting test to be charged business rates rather than council tax. As chartered certified accountants in Guildford, Surrey advising self-catering and holiday-let clients across the UK, we set out what the new Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026 changes, who it protects, and what owners should check before it takes effect.

Business Rates or Council Tax — and Why the Line Matters

Self-contained, self-catering accommodation is charged business rates instead of council tax where it is genuinely run as a commercial holiday let. Which side of the line you fall on has a real financial consequence. On the business-rates side, many small holiday lets qualify for Small Business Rate Relief and pay little or nothing. On the council-tax side, the property attracts a full council-tax band and, since April 2025, can be hit with a second-homes premium of up to 100% where the local authority has adopted one.

Since 1 April 2023, the gateway test in England has been strict. To be treated as non-domestic, a property must have been available to let commercially as self-catering accommodation for at least 140 days, and actually let for at least 70 days, in the previous 12 months, with the intention that it will be available for 140 days or more in the year ahead. Nights of private or discounted family use, and stays over 28 nights, do not count towards the 70.

What Changes From 24 July 2026

The Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026 (SI 2026/692) amends section 66 of the Local Government Finance Act 1988. It keeps the 140-day and 70-day test as the standard route, but creates two new exceptions where that test no longer has to be met:

• Mixed-use business sites — where the self-catering unit is occupied together with land used for a different, non-domestic purpose and forms part of the same rateable hereditament. Think a holiday cottage on a working farm, or units attached to a pub, vineyard, activity centre or events venue.
• Complexes of five or more units — where the property is part of a single hereditament that includes five or more self-catering buildings or units, none of which is anyone’s sole or main residence. Holiday parks and cottage estates are the obvious examples.

In both cases, the 140-day availability and 70-day letting tests fall away. The change comes into force on 24 July 2026.

The Catch — What the Exception Does Not Do

The relief is targeted, not universal. A standalone single holiday let that is not part of a mixed-use site or a five-or-more-unit complex must still pass the full 140/70 test to stay on business rates. For a complex to qualify, the units must sit within one hereditament — treated as a single hereditament even where separated only by a highway — and cannot be occupied as anyone’s main home. The Valuation Office Agency can still ask for evidence that a property is genuinely part of a qualifying business or complex.

It is also worth separating two different rule changes. This Order is about local taxation — business rates versus council tax. It does not revive the Furnished Holiday Lettings income-tax regime, which was abolished from April 2025. The two sit in different parts of the tax system and need to be planned for separately.

Who Benefits — and Who Should Still Pay Attention

The clear winners are diversified rural and hospitality businesses: farms with a cottage or two, pubs and vineyards with guest accommodation, activity and wedding venues, and holiday-park operators. So too are newer complexes still building up occupancy, and properties in seasonal locations that cannot reliably evidence 70 let nights every year. For them, a single quiet season no longer risks tipping the property back into council tax and a possible second-homes premium.

Owners of single, standalone lets should not assume the pressure is off. For them the 140/70 test is unchanged, records still matter, and nights of personal or family use still cannot be counted. Anyone close to the threshold, or exposed to a local second-homes premium, should keep a careful letting diary.

What Holiday-Let Owners Should Do Now

• Check whether your unit is occupied together with other business land, or forms part of a group of five or more units — that is what now determines your route.
• Review how your property is listed by the Valuation Office Agency and whether the hereditament boundary reflects the wider business.
• Keep clear commercial records — booking platforms, invoices and an availability calendar — even where the exception applies.
• Model the numbers both ways: business rates with Small Business Rate Relief against council tax plus any second-homes premium.
• If you are near the 70-day threshold on a standalone let, plan availability and marketing before the year-end, not after.

Frequently Asked Questions

When does the new exception take effect?

The Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026 comes into force on 24 July 2026 and applies in England.

Does my single holiday cottage now escape the 70-day test?

Not on its own. A standalone let that is not part of a mixed-use business site or a complex of five or more units still has to meet the 140-day availability and 70-day letting tests.

My cottage is on a working farm — do I still need 70 let nights?

If the cottage is occupied together with the farmland as part of the same rateable hereditament, the new mixed-use exception should apply, so the 70-day test would no longer be required. The Valuation Office Agency may still ask for evidence.

Is this the same as the abolition of the Furnished Holiday Lettings rules?

No. This change is about business rates versus council tax. The Furnished Holiday Lettings income-tax regime was separately abolished from April 2025.

How TaxDigit Can Help

We help holiday-let and self-catering owners work out which side of the business-rates line they fall, keep the records that support it, and plan the wider tax position. That includes tax advisory and planning, bookkeeping to evidence commercial letting, and year-end accounts for the trading side of the business. You can read the legislation in full in the Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026.

Plan Ahead With TaxDigit

If you run a holiday let, a farm with self-catering units, or a larger complex, now is the time to check where you stand before 24 July 2026. Call us on 01483 230 777, email info@taxdigit.co.uk, or get in touch here and we will help you plan with confidence.