{"id":1419,"date":"2022-01-10T01:25:35","date_gmt":"2022-01-10T01:25:35","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=1419"},"modified":"2025-09-22T17:10:17","modified_gmt":"2025-09-22T16:10:17","slug":"stamp-duty-for-purchase-of-business","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/business-sale-purchase\/stamp-duty-for-purchase-of-business\/","title":{"rendered":"Stamp Duty for a Purchase of Business in the UK"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">Stamp duty is a tax that you may have to pay if you are <a href=\"https:\/\/legalvision.co.uk\/business-sale-purchase\/5-tips-when-purchasing-a-business-in-england-and-wales\/\">purchasing a business<\/a>. It can apply to <\/span>a business&#8217;s <a href=\"http:\/\/Asset\">assets and shares<\/a><span style=\"font-weight: 400\">. Knowing stamp duty rates is important when planning to buy a business, as it is a cost that you will have to factor in. This article will outline some of the key points to keep in mind when dealing with stamp duties and touch on circumstances where you may not have to pay stamp duty.<\/span><\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/01\/13013547\/buying-a-business-560x792-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Buying a Business: Guide to Negotiating Terms<\/div>\n            <div class=\"body-text\">\n                <p>Buying a business? Download this free guide to help you negotiate key terms like price, stock, and employee entitlements.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.uk\/buying-business-guide.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What is Stamp Duty?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">As mentioned, stamp duty is a tax levied on certain types of goods. Usually, the purchaser of the land or shares will pay the tax. Stamp duty primarily applies to:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">shares;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">marketable securities; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">certain transactions involving partnerships.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Stamp Duty for Shares<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">If you purchase a business by buying shares, you will have to pay stamp duty tax depending on how you acquired the shares and the <a href=\"https:\/\/legalvision.co.uk\/corporations\/value-my-companys-shares\/\">value of the shares<\/a>. This will apply to the purchase of:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">existing shares in a UK company;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">existing shares in a foreign company with a share register in the UK;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">rights in relation to new shares; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">an option to buy shares.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">Crucially, whether you buy the shares online or through a stock form will make a difference. If you purchase the shares electronically, you will have to pay <\/span>stamp duty reserve tax<span style=\"font-weight: 400\">. However, if you purchase the shares through a stock transfer form, you will only pay stamp duty if the purchase was for over \u00a31,000.<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">The amount you paid for the shares determines the amount of tax you pay, usually 1.5%. For example, if you pay \u00a310,000 for shares, you will have to pay \u00a3150 tax, even if those shares are, in fact, worth \u00a320,000. This is because you determine the value of the tax by the amount you actually paid for them, not by the market value of the shares.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center 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For example, if you:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">do not pay any money for the shares you receive;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">receive the shares because you have subscribed to a new issue of shares in the company;&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">buy shares in an &#8216;Open Ended Investment Company&#8217; from the fund manager; or<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">buy units in a unit trust.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">Further, you will usually not have to pay stamp duty if you are purchasing shares in a non-UK company (though you may have to pay other types of tax). <\/span><span style=\"font-weight: 400\">However, if you are purchasing an entire business, in all likelihood, you will have to pay stamp duty, and the standard stamp duty rate is 1.5% on shares.<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">Finally, you should keep in mind that you may have to pay capital gains tax if you end up selling your shares to another person at some point in the future.<\/span><\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Stamp Duty Land Tax<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Stamp duty land tax is also a common term that you may encounter when dealing with stamp duties. Stamp duty land tax will apply if you are buying the assets of a business, and those assets include land. Stamp duty land tax is usually at a rate between 1-5%, depending on the property. You can access a stamp duty calculator online to get a closer approximation of the amount you will have to pay on land.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Examples of Property<\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">Some examples of property that you will have to pay stamp duty land tax on include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">a business premise, such as a coffee shop;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a factory; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\"><a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/agricultural-lease\/\">agricultural land<\/a>.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">This applies if you are buying a &#8216;mixed&#8217; property. Mixed property is a property that includes a residential aspect and a commercial aspect, such as a coffee shop with a dwelling house above it.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Further, the stamp duty land tax applies to both leasehold and freehold titles.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Amount of Tax<\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">The amount that you are taxed varies with the value of the property. The first \u00a3150,000 of the property is not subject to stamp duty land tax. The next \u00a3100,000 is subject to a 2% stamp duty land tax. The remainder of the property&#8217;s value is subject to a 5% stamp duty land tax.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">For example, imagine you are buying a coffee shop where the purchase price is \u00a3500,000. The first \u00a3150,000 is not taxed. Then the next \u00a3100,000 (which is the amount between \u00a3150,000 &#8211; \u00a3250,000) is taxed at 2%. Then the remainder (which is the amount between \u00a3250,000 &#8211; \u00a3500,000) is taxed at 5%.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">This means that you end up paying a 2% tax on \u00a3100,000 (which is \u00a32000) then a 5% tax on \u00a3250,000 (which is \u00a312,500), for a total stamp duty of \u00a314,500.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n<p><span style=\"font-weight: 400\">You can avoid having to do the maths yourself by using a stamp duty calculator.&nbsp;<\/span><\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p><strong>Key Statistics and Data Points<\/strong><\/p>\n<ul data-start=\"89\" data-end=\"631\">\n<li data-start=\"89\" data-end=\"228\">\n<p data-start=\"91\" data-end=\"228\"><strong data-start=\"91\" data-end=\"100\">0.5%:<\/strong> <a href=\"https:\/\/www.gov.uk\/tax-buy-shares\">Buying shares in a UK company<\/a> usually incurs 0.5% Stamp Duty\/SDRT on the consideration. <span class=\"\" data-state=\"closed\"><span class=\"ms-1 inline-flex max-w-full items-center relative top-[-0.094rem] animate-[show_150ms_ease-in]\" data-testid=\"webpage-citation-pill\"><span class=\"relative start-0 bottom-0 flex h-full w-full items-center\"><span class=\"flex h-4 w-full items-center justify-between overflow-hidden\"><span class=\"max-w-[15ch] grow truncate overflow-hidden text-center\"><br \/>\n<\/span><\/span><\/span><\/span><\/span><\/p>\n<\/li>\n<li data-start=\"229\" data-end=\"411\">\n<p data-start=\"231\" data-end=\"411\"><strong data-start=\"231\" data-end=\"244\">Up to 5%:<\/strong> Non-residential property SDLT bands\u20140% to \u00a3150,000; 2% on \u00a3150,001\u2013\u00a3250,000; 5% above \u00a3250,000 (<a href=\"https:\/\/www.gov.uk\/stamp-duty-land-tax\/nonresidential-and-mixed-rates\">England and Northern Ireland<\/a>). <span class=\"\" data-state=\"closed\"><span class=\"ms-1 inline-flex max-w-full items-center relative top-[-0.094rem] animate-[show_150ms_ease-in]\" data-testid=\"webpage-citation-pill\"><br \/>\n<\/span><\/span><\/p>\n<\/li>\n<li data-start=\"412\" data-end=\"631\">\n<p data-start=\"414\" data-end=\"631\"><strong data-start=\"414\" data-end=\"421\">0%:<\/strong> No Stamp Duty on transfers of goodwill or intellectual property; charges abolished in 2000\/2002. Apportionment applies if <a href=\"https:\/\/www.gov.uk\/hmrc-internal-manuals\/stamp-taxes-shares-manual\/stsm011045\">transferred with shares<\/a> in a single instrument.<span class=\"\" data-state=\"closed\"><span class=\"ms-1 inline-flex max-w-full items-center relative top-[-0.094rem] animate-[show_150ms_ease-in]\" data-testid=\"webpage-citation-pill\"><br \/>\n<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p data-start=\"633\" data-end=\"1044\"><strong data-start=\"633\" data-end=\"645\">Sources:<\/strong><\/p>\n<ol>\n<li data-start=\"633\" data-end=\"1044\">HMRC, <em data-start=\"654\" data-end=\"679\">Tax when you buy shares<\/em>.<\/li>\n<li data-start=\"633\" data-end=\"1044\">HMRC, <em data-start=\"736\" data-end=\"812\">Stamp Duty Land Tax: Rates for non-residential and mixed land and property<\/em>.<\/li>\n<li data-start=\"633\" data-end=\"1044\">HMRC, <em data-start=\"869\" data-end=\"969\">STSM011045 \u2013 Transfer of Intellectual Property and\/or Goodwill with Stock or Marketable Securities<\/em> (HMRC manual, updated 10 July 2025).<\/li>\n<\/ol>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Knowing the amount of stamp duty that you have to pay is important, so you know how much your business purchase will cost. Property purchases will be taxed at different rates depending on the purchase price, rather than the property&#8217;s value. Further, share purchases are usually taxed at standard rates of 1.5%, but this may vary depending on the value of the share purchase. Remember that you can use a stamp duty calculator to know exactly how much you can expect to pay as part of your stamp duty obligations.<\/span><span style=\"font-weight: 400\">&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">If you need help regarding stamp duty, <\/span><a href=\"https:\/\/legalvision.co.uk\/business-sale-purchase-lawyers-lp\"><span style=\"font-weight: 400\">LegalVision\u2019s business sale and purchase lawyers<\/span><\/a><span style=\"font-weight: 400\"> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on<\/span><span style=\"font-weight: 400\"> <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a><\/span><span style=\"font-weight: 400\"> or visit our <\/span><a href=\"https:\/\/legalvision.co.uk\/membership\"><span style=\"font-weight: 400\">membership page<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1641777453867\"><strong class=\"schema-faq-question\"><strong>Who will pay the stamp duty?<\/strong><\/strong> <p class=\"schema-faq-answer\">It is usually the purchaser who has to pay the stamp duty. Therefore, if you are the purchaser, you should seek legal advice to ensure you do not make any mistakes in your stamp duty payment.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1641777463217\"><strong class=\"schema-faq-question\"><strong>If the business I am purchasing is not in the UK, will I still have to pay stamp duty?<\/strong><\/strong> <p class=\"schema-faq-answer\">It is unlikely that you will have to pay stamp duty on a business not connected to the UK. However, you may have to pay other types of tax depending on the business you are purchasing.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/1419\" \/>            <input value=\"https:\/\/legalvision.co.uk\/business-sale-purchase\/stamp-duty-for-purchase-of-business\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Stamp Duty for a Purchase of Business in the UK\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Stamp duty is a tax that you may have to pay if you are purchasing a business. It can apply to a business&#8217;s assets and shares. Knowing stamp duty rates is important when planning to buy a business, as it is a cost that you will have to factor in. This article will outline some<a href=\"https:\/\/legalvision.co.uk\/business-sale-purchase\/stamp-duty-for-purchase-of-business\/\">Continue reading <span class=\"sr-only\">&#8220;Stamp Duty for a Purchase of Business in the UK&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13325,"featured_media":626,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"2235,1342,2030,2914,1159,2415","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[29],"tags":[21,101,292,293,294,295],"class_list":["post-1419","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-sale-purchase","tag-medium-business","tag-share-sale","tag-stamp-duty","tag-business-purchase","tag-share-purchase","tag-stamp-duty-land-tax"],"acf":[],"yoast_head":"<!-- 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He specialises in disputes and commercial transactions and has experience in commercial litigation in the UK. He has completed placements at various Chambers and white shoe law firms specialising in both contentious and transactional law, and served as a Parliamentary Intern in the House of Commons. In addition, he also has experience in advocacy through having worked at an international NGO. Qualifications: Masters of Laws (LLM), BPP Law School, BA, Jurisprudence, University of Oxford; MSc, Political Theory, London School of Economics and Political Science (LSE).","sameAs":["https:\/\/www.linkedin.com\/in\/efe-kati\/"],"url":"https:\/\/legalvision.co.uk\/author\/efekati\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/business-sale-purchase\/stamp-duty-for-purchase-of-business\/#faq-question-1641777453867","name":"Who will pay the stamp duty?","acceptedAnswer":{"@type":"Answer","text":"It is usually the purchaser who has to pay the stamp duty. Therefore, if you are the purchaser, you should seek legal advice to ensure you do not make any mistakes in your stamp duty payment.\u00a0","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/business-sale-purchase\/stamp-duty-for-purchase-of-business\/#faq-question-1641777463217","name":"If the business I am purchasing is not in the UK, will I still have to pay stamp duty?","acceptedAnswer":{"@type":"Answer","text":"It is unlikely that you will have to pay stamp duty on a business not connected to the UK. 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