PISCES Regs 2025 enacted – transfers to be exempt from stamp duty and SDRT

The Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025 (SI 2025/666) were enacted on 10 June 2025 and come into force on 3 July 2025.

PISCES is a sand-boxed UK market for secondary sales of shares in private companies, authorised by HM Treasury’s Financial Services and Markets Act 2023 (PISCES Sandbox) Regulations 2025 as part of a trial running until 2030. The goal of the sandbox is to allow intermittent trading of private company shares in a controlled environment. It is a somewhat novel development in the UK, although there are similarities with NASDAQ Private Market already running in the US. PISCES is one way in which the UK government is fishing for companies to stay private for longer here and create a more sophisticated market for sales of shares in series B+ ventures in a way that one already finds in the major US markets.

Stamp duty – introduced in 1694 during the reign of William III and Mary II to pay for the war against France – is a tax charged on instruments transferring stock and marketable securities (and interests in partnerships that hold stock and marketable securities as partnership property). Stamp duty is charged on an ad valorem (‘according to value’) basis at 0.5% of the chargeable consideration (and in limited circumstances by reference to market value), rounded up to the nearest £5. Stamp duty must be paid within 30 days of execution; interest and fines apply to late submissions. Transfers are exempt where the aggregate consideration is £1,000 or less (and there is a section on the back of the stock transfer form to complete). There are, unsurprisingly, stringent anti-avoidance provisions.

The charge to stamp duty arises principally (but not exclusively) in connection with a transfer of shares (or loans convertible into equity) by way of a stock transfer form. Up until March 2020 and the outbreak of the Covid pandemic, there were very real stamps applied to the stock transfer forms by stamping machines at HM Revenue & Customs in centuries-old tradition. Since then, the stamping machines have been shipped off to a museum or are on display for those scheduling a tour of HMRC, and the “stamping” has come in the form of a unique authentication code supplied by HMRC. A UK company’s register of members must not be updated to reflect a transfer of legal title unless and until the stamp duty has been paid to HMRC and the stock transfer form has been stamped.

Under the Regulations, PISCES share transfers will be exempt from stamp duty (and its younger cousin, stamp duty reserve tax) and the registers of a UK company could be updated immediately without waiting for stamping. Such transfers will therefore benefit from the same exemptions available for transfers of shares on AIM, the growth market for smaller companies established by the London Stock Exchange.

Will investors take the bait to push their portfolio companies to engage with PISCES and go through the necessary rigmarole and pay the associated set up and ongoing compliance costs? Perhaps some will, but that is a much broader question that we aim to tackle in future Insight pieces as we follow developments in PISCES generally.

This Insight piece was written by Henry Humphreys with input from Alina Merchant Mohamed. If you have questions about PISCES and secondary share sales generally, do please reach out to the team.

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