Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Principal charge definition

What does Principal charge mean? In UK trust practice, a principal charge is the periodic inheritance tax (IHT) charge that can arise on “relevant property” held in a trust at each ten‑year anniversary of the trust’s commencement (the ten‑year charge). It is a descriptive practitioner term (not defined in statute); the legislation (Inheritance Tax Act 1984, relevant property regime) and HMRC guidance refer to a periodic charge. Key features: - Applies to relevant property trusts (commonly discretionary and most post‑2006 trusts without an immediate post‑death interest), not to excluded categories (for example, qualifying disabled person’s trusts) and subject to exemptions/reliefs (such as spouse exemption, business or agricultural...

SDRT principal charge—exemptions, non-chargeable securities, stamp duty interactions, CIS/ETF and charity reliefs, CREST flagging, and forthcoming UK listing relief and STC reforms

Published by a LexisNexis Tax expert

Practice notes

FORTHCOMING CHANGE relating to a new SDRT exemption:

As set out at Budget 2025, Finance Bill 2026 will create a new relief from the principal (but not the higher rate) SDRT charge, known as the UK listing relief. It will apply to contracts to transfer any chargeable Securities in a company during the three years following the company’s initial admission of its shares (or depositary interests in shares) to trading on a UK regulated market, provided that first UK listing takes place on or after 27 November 2025. For further detail, see Practice Note: UK listing relief from Principal charge to SDRT and News Analyses: Finance Bill 2026—UK listing relief—Stamp duty reserve tax holiday for new listings and Budget 2025—Tax analysis—Stamp and transfer taxes.

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework:

In 2027, stamp duty and SDRT will be superseded by a single, self-assessed securities tax—the securities transfer charge (STC)—to be filed and paid via a new online portal. The STC’s design will, in broad terms, mirror the proposals for that regime consulted on in 2023...

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Web page updated on 22/05/2026

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