Secondaries and UK Stamp Duty

In private equity secondary transactions, it is commonly assumed that UK stamp duty is not payable. However, in light of the latest HMRC consultation on modernising stamp duty on shares, the approach to dealing with stamp duty on secondaries may be due to change.

The HMRC consultation, which closes on 13 October 2020, focuses on share transfers and does not expressly deal with transfers of partnership interests. This is a missed opportunity because the stamp duty treatment of secondaries involving the transfer of an interest in a partnership is one of the key areas where the stamp duty regime is outdated and impractical.

In this client note, we set out our commentary on the potential outcomes of the consultation and implications for private equity secondary transactions.

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