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This week:
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The Government publishes policy paper and draft legislation for the UK’s new securities transfer tax, which will replace stamp duty on securities
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The Government publishes its 2025/2026 annual report of the UK’s national security and investment (NSI) regime
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The Takeover Panel Code Committee consults on miscellaneous minor amendments to the Takeover Code
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Changes come into effect that make it easier to access trust information stored in the UK’s Register of Overseas Entities
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Other items of interest
Legislation and policy for new securities transfer tax (STT) published
The Government has published draft legislation that will pave the way for a single tax on the transfer of shares in UK companies (STT).
STT will replace the current regime for taxing transfers of securities, which is achieved through a combination of stamp duty (an ancient documentary tax) and stamp duty reserve tax (SDRT) (which, in practice, applies principally to publicly traded securities).
The Government aims to introduce STT in 2027, at which point stamp duty and SDRT will no longer apply to transfers of shares in UK companies or other relevant securities.
The main charge to STT will apply to transfers of chargeable securities for money or money’s worth (and so most gifts will not be taxable). As a general rule, this will affect the following types of security.
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Shares in UK companies. This includes direct shares in UK companies, but it does not include shares in certain open-ended investment companies, nor depositary receipts representing UK company shares. Shares in non-UK incorporated companies will be outside the scope of STT. This removes the extra-territorial scope of SDRT (which applies to non-UK shares if there is a UK register) and stamp duty (which technically applies if there is any “nexus” to the UK).
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Equity-like debt instruments (EDIs) in UK companies. This includes debt instruments that are convertible into equity shares in UK companies (e.g. convertible loan notes), which carry an interest rate or coupon above a normal commercial return, or which carry an interest rate that is referable to the value of any business or property (i.e. “results-dependent interests”). It also includes sukuk that operate similarly to these kinds of debt instrument.
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Units in unit trust schemes. However, STT will not apply to transfers of units in excluded unit trust schemes (such as offshore unit trusts, charitable unit trusts, share incentive plans, registered pension scheme trusts, and trusts of property held for limited partnerships).
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Interests in and rights to acquire shares/EDIs. This will include instruments such as options, warrants and provisional allotment letters. It will also include depositary interests in shares or EDIs in a non-UK company if the company is resident in the UK for corporation tax purposes.
The other key aspects of the new STT are as follows.
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A charge to tax will arise at one of three points – on entering into the agreement, when the agreement becomes unconditional, or when the transfer is “substantially completed” – depending on whether the agreement is conditional and/or electronic.
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STT will apply at a rate of 0.5% of the amount or market value of the transfer consideration (or, in some cases, of the market value of the securities in question). This continues the current SDRT rate (and abolishes the current stamp duty rate of 0.5% rounded up to the nearest £5).
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As is currently the case, a higher rate of 1.5% will generally apply where a company’s securities are transferred to a clearance service (to allow them to be traded, free of STT, by book entry only) or a depositary receipt service (to allow depositary receipts to be traded, free of STT, instead of the shares themselves).
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If the amount or value of the consideration is not known when the charge arises, STT will be payable on a “reasonable estimate” of the consideration, with a reassessment when the consideration is determined. This replaces the contingency principle for stamp duty, which currently means that unascertainable consideration subject to a maximum (as is typically the case for a private company earnout) is subject to stamp duty on the maximum amount.
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The main charge to STT will be payable by the buyer. This is the person who pays the consideration (and might not be the person who actually receives the securities in question).
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STT will arise wherever the transfer of chargeable securities is carried out.
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Various reliefs from STT will apply if certain conditions are met (most of which replicate current reliefs). Apart from more functional reliefs, these will apply to transfers between group members, demergers, new holding company insertions, transfers of shares on growth markets (e.g. AIM and AQSE Growth), transfers of shares in Main Market companies within the first three years of listing, transfers into pension schemes, and transfers where there is no change in the beneficial ownership of the securities.
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STT will be payable within 14 days for electronic transactions or 30 days for other transactions. If the value of the consideration for the transfer depends on uncertain future events (and is not expected to become clear for at least six months), the buyer will be able to apply to HMRC to defer payment of STT until the consideration becomes clear.
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A company will not be permitted to register a transfer of its shares (or other securities that attract STT) unless STT has been paid or an exemption applies.
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Transfers of interests in partnerships will be subject to STT if the partnership property includes chargeable securities held as partnership property as a result of arrangements with a main purpose of avoiding STT.
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The tax will be fully self-assessed and payable through a new HMRC online portal.
Read the Government’s policy paper on the UK’s new securities transfer tax (STT)
Access the draft legislation for the UK’s new securities transfer tax (STT) (opens PDF)
Fifth annual national security and investment report published
The Government has published its annual report on the UK’s national security and investment (NSI) regime for 2025/2026.
Under the NSI regime (which is set out in the National Security and Investment Act 2021), the Government has the power to intervene in and, ultimately, block certain acquisitions of shares or assets if it believes the acquisition poses a risk to the UK's national security.
Certain types of acquisition in certain "sensitive sectors" trigger mandatory notification, in which case the buyer may not proceed with the acquisition until it has received approval from the UK Government. (Transactions outside of these sectors can be notified on a voluntary basis, which buyers may consider doing to avoid the possibility of proactive intervention by the Government.)
The report provides statistics on (among other things) the number of notifications made, time periods for responding to a notification, the number of transactions called in for further investigation, and the proportion of call-in transactions that were cleared, blocked or unwound between 1 April 2025 and 31 March 2026.
Some key points worth noting include the following.
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The Government reviewed 1,220 notified acquisitions, an increase from last year. Of these, only 54 (4.4%) resulted in a call-in. The Government also called in 6 acquisitions that had not been notified. Of the 60 called-in acquisitions, only 9 resulted in a final order blocking the acquisition or attaching conditions to it.
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Similarly to last year, the sectors accounting for the most call-ins were defence (47%), critical suppliers to government (33%) and military and dual-use (MDU) (33%). However, the sectors accounting for the most final orders were advanced materials (5), data infrastructure (3) and MDU (2). Buyers looking to acquire in these sectors should prepare for more rigorous scrutiny.
(It is worth noting that the Government intends to break the “advanced materials” sector out into three separate sectors, creating new sectors for semiconductors and critical minerals.)
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Similar to last year, call-ins most frequently involved buyers associated with the UK (52%), China (30%) and the USA (23%). Whilst the UK and USA generated the highest and second-highest number of notifications, Chinese acquirers accounted for relatively few notifications but a high number of call-ins. Final orders most frequently involved buyers associated with the UK (5), China (3), Germany (2) and the USA (2).
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On average it took between 11 and 13 calendar working days to accept a notification, which is around 5 working days longer than last year and perhaps represents the growing workload of the Investment and Security Unit. On average, it took a further 29 or 30 statutory working days to issue a call in (where applicable), and either a further 47 calendar working days to clear a call-in transaction or a further 69 working days to issue a final order.
As a result, the timeline from notification to final decision in more complex cases can last for up to three months or more. Acquirers in sensitive jurisdictions should build this into their transaction timetables.
Read the Government’s 2025/2026 annual report on the National Security and Investment Act 2021
Takeover Panel proposes various changes to the Takeover Code
The Code Committee of the Takeover Panel is proposing various changes to the Takeover Code – the principal body of rules that governs takeovers of UK public companies.
The changes are, in the Committee’s words, intended to codify aspects of Executive practice and to clarify, simplify and update provisions so that the Code continues to operate clearly and effectively. Many of the changes simply codify the Panel Executive’s existing practice.
The proposed changes that most affect the substance of the Code are set out below.
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Reverse takeovers. The proposals would expand the circumstances in which information must be provided to other bidders where a target is looking to enter into a reverse takeover. Under the proposed changes, the target would be required to provide any bidders or bona fide potential bidders with all information it provides to the counterparty to the proposed reverse takeover after that other bidder’s or potential bidder’s approach. This would effectively mirror the existing position where a target is negotiating a sale of its business and assets.
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Put up or shut up. The proposals would streamline the arrangements under which a target can ask the Panel to extend a so-called “put up or shut up” deadline (the period within which a potential bidder must clarify whether it intends to make an offer). This includes removing the requirement for a target to comment publicly on negotiations with the potential bidder and the anticipated timetable for completion (which the Panel does not enforce in practice anyway).
The deadline for responding is 2 October 2026.
Access the PCP 2026/1 Miscellaneous Code amendments (opens PDF)
Changes to access to Register of Overseas Entities trust information go live
Legislation has come into effect that increase public access to information on trusts held in the UK’s Register of Overseas Entities (ROE).
Under the ROE regime, details of certain trusts that sit within the holding structure of registrable overseas entities must be filed at Companies House.
This information is publicly available by application to Companies House.
Previously, to gain access, it was necessary to state the name of the specific trust in question in the application. This requirement has now been removed, making it easier to access trust information for a given overseas entity.
Moreover, previously, if any trust information related to a minor (someone below the age of 18), Companies House would withhold all information on the trust. In practice, this limited access to trust information. This restriction has now been removed, allowing Companies House to continue to withhold information on minors but to disclose other information regarding a trust.
The changes took effect from 9 July 2026.
Other items
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Director breached duty by taking unauthorised loans from company. In McCarthy v Marshall [2026] EWHC 1585 (Ch), the High Court held that a company director had committed breaches of his duties to the company by making interest-free drawings on his director’s loan account to fund personal expenses. The drawdowns had been made without the other directors’ knowledge and without shareholder approval under section 197 of the Companies Act 2006. The fact that the director had intended to repay the funds was irrelevant.
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Share digitisation implementation plan published. The Dematerialisation Market Action Taskforce (DEMAT) has published a UK implementation plan for the withdrawal of paper share certificates – so-called “share digitisation”. The report sets out a roadmap for achieving share digitisation for publicly traded companies, from step 1 (abolishing paper share certificates and relying solely on electronic records) through to step 3 (a fully intermediated model). At the same time, the Government has published a policy paper, accepting the implementation plan and committing to pass legislation to abolish paper share certificates before the end of 2027.
Read the Government’s policy paper on the digitisation of publicly traded company shares
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Small changes made to PSC regime for LLPs. Regulations have come into effect that remove the requirement for a limited liability partnership (LLP) to obtain a service address for legal entities which the LLP is required to register under the PSC regime (so-called “registrable relevant legal entities”) and for other registrable persons (such as governments and local authorities). Companies, however, remain required to obtain this information.
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Treasury publishes first digital markets champion report. HM Treasury has its first Wholesale Digital Markets Champion report. The report focuses on tokenised and digitally native assets with a view to scaling tokenisation within the UK. The report identifies ten key priorities and notes that action groups are being established to focus work on those priorities.
Read the first Wholesale Digital Markets Champion report (opens PDF)
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Companies House publishes 2025/2026 account. Companies House has published its accounts for 2025/2026. The accounts set out Companies House’s financials, but also key developments and activities, during the financial year.
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