HM Revenue & Customs has announced the abolition of the 1.5% Stamp Duty Reserve Tax (SDRT) on the entry of UK shares and some types of debt securities into certain clearing systems. This comes after the decision of the European Court of Justice (ECJ) yesterday in HSBC Holdings plc, Vidacos Nominees Ltd v HMRC ruling that the UK tax is unlawful under EU law on the basis that it infringes on EU principles of the free movement of capital. This case is the latest in a series of decisions against the UK government, the most notable being the ECJ decision in Marks & Spencer plc v David Halsey (HM Inspector of Taxes) on 7 April, 2005.

The decision of the ECJ yesterday was a success for HSBC who can now recover £27 million of UK SDRT it was charged in 2000 when it acquired French Bank CCF.