Securities Transfer Tax consultation: Simmons & Simmons response

Simmons & Simmons LLP has responsded to HMRC's technical consultation on the draft legislation for the new Securities Transfer Tax (STT), published on 13 July 2026 as part of the Finance Bill 2026-27 package (the Draft Legislation).

Given the volume of technical points raised by the Draft Legislation, we have focused our response on the three areas of most immediate concern to our practice and our clients: the treatment of transfers of partnership interests; the treatment of units in unit trust schemes and non-UK fund equivalents; and the payment, relief and registration procedure applicable to successive transfers of the same securities.

In our view, the most important points arising from the Draft Legislation in the three areas addressed in our response are as follows:

• We strongly welcome clause 70, which confirms that a transfer of a partnership interest is out of scope of the main charge save where a targeted anti-avoidance rule applies. However, we consider that the Draft Legislation leaves an unresolved ambiguity as to whether a partnership interest itself falls within the definition of "chargeable securities" at clause 4(1)(d), because a partner's economic interest in partnership property could be described as an "interest in" any chargeable securities held as partnership assets. We recommend an express carve-out.
• Clause 70 also does not, in our view, adequately address in specie contributions of chargeable securities to, or in specie redemptions from, a partnership. We recommend a specific exemption for such contributions and redemptions.
• We welcome the fact that clauses 48 to 54 are broadly intended to replicate the existing exemptions for funds. However, non-UK equivalents of unit trust schemes and OEICs are not brought onto an equal statutory footing with their UK counterparts, contrary to the clear direction set out in the 2023 consultation. We recommend that the Draft Legislation be amended to extend the exemptions in clauses 48 to 54 to comparable non-UK arrangements that have equivalent features.
• We also comment on further changes to the treatment afforded to unit trust schemes, open-ended investment companies ("OEICs") and contractual schemes under Chapter 3 Part 2 of the Draft Legislation, which we consider are necessary to preserve the current accepted treatment of transactions involving such collective investment schemes.
• We welcome the move to a single accountable date and the immediate issuance of a Unique Transaction Reference Number (UTRN) on submission through the new online portal referred to in the Explanatory Notes, which should materially improve the speed with which company registrars can update the register of members. However, clause 62 retains an approach based on the existing model, under which a company must not register a transfer until it receives HMRC's acknowledgement of receipt (or a statement that no return was required), and clauses 56 to 61 impose accountable dates, deferral rules and redetermination obligations that do not, in our view, adequately address the practical position on successive transfers of the same securities within a short period, for example on a share sale immediately followed by a group reorganisation. We recommend specific procedural provision for such cases.