The short version: it seems that it has, with effect from 1 January 2024, as a result of the Retained EU Law (Revocation and Reform) Bill receiving Royal Assent on 29 June 2023. What is currently unclear is whether that is a deliberate policy choice or an unintended consequence (no doubt one of many) of sweeping retained EU law away in such a broad brush fashion. And, if it is the latter, whether that will be corrected before the change actually takes effect.

The UK set up its stamp duty legislation so that when shares in a UK company are traded in CREST 0.5% stamp duty is collected on each trade (pedants look away now, this blog is not going to distinguish between stamp duty and SDRT!). However, because of the difficulty of collecting stamp duty when shares in a UK company are traded on a foreign exchange through a clearance system or in depositary receipt form, the UK chose to collect a 1.5% "season ticket" charge upfront when the underlying shares are issued or transferred to the clearance system or depositary.  

A series of ECJ decisions starting back in 2009 established that it was contrary to the EU Capital Duties Directive, and therefore unlawful, to impose the season ticket charge on the issue of shares at all, or on their transfer if the transfer was integral to raising new capital or for the purpose of listing shares without a change in beneficial ownership.

So, although the 1.5% charge remained on the UK statute book, it was not collected in these circumstances as a result of being unlawful under EU law. Further, once the Brexit transition period ended, HMRC accepted that it should still not be collected on the basis that the relevant provisions of the Capital Duties Directive formed part of retained EU law under the European Union (Withdrawal) Act 2018.  

So far, so good, although you will no doubt have spotted the issue coming down the tracks.  As a result of section 2 of the Retained EU Law (Revocation and Reform) Act 2023 those provisions of the Capital Duties Directive will no longer form part of retained EU law, and will no longer have supremacy over the UK domestic legislation imposing the 1.5% charge, with effect from 1 January 2024. Restoring the supremacy of UK legislation over EU law is, of course, the raison d'etre of the Act.

The Act does contain a limited power to preserve the status quo by regulations. Given that the markets have been used to not having the 1.5% charge for over a decade now, and many corporate structures in place rely on that not being the case, the crucial question now is whether such regulations will be made.

An early statement of policy here would be welcomed as we are now in a period of material uncertainty both for structuring new transactions and for existing groups. For new transactions, it is a disincentive to using a UK incorporated holding company for a newly listed group if that listing might not take place until 2024 and would involve at least a partial overseas listing. Or to the UK incorporated company going on top in a "merger of equals" with a non-UK parented group. The potential for that to come with a 1.5% cost could be a factor for using a non-UK incorporated holding company instead. For existing groups with shares held in a clearance system this could have the effect of introducing a 1.5% cost on routine corporate transactions such as issuing shares to satisfy employee share awards or scrip dividends.  

Given that the UK has effectively lived without this charge since 2009, and against a backdrop of seeking ways to improve the investability (is that a word?) of UK companies and the UK markets, surely preserving the status quo would be the logical choice.