Recognised stock exchanges

1. The term 'recognised stock exchange' occurs throughout the Taxes Acts and in various tax regulations. For example it is used in the definition of investments which may be held in Individual Savings Accounts (ISAs) and in the qualifying criteria for the quoted Eurobond exemption. Recognised stock exchange legislation is found under section 1005 Income Tax Act 2007 (ITA).
2. HM Revenue & Customs (HMRC) will consider the designation of a stock exchange as a recognised stock exchange under section 1005 ITA on receipt of a request made by a stock exchange. The fact that a particular exchange is not recognised may simply mean that recognition has not been requested.
3. Recognition under section 1005 ITA is for tax purposes only and confers no other status on the exchange concerned. It does not constitute any form of recognition or approval for regulatory or other purposes nor does it provide any form of approval or recommendation of any of the investments which are listed or traded on that exchange.
4. The definition of a recognised stock exchange is given in section 1005(1) ITA. It includes any market of a recognised investment exchange designated as a recognised stock exchange by an order made by the Commissioner for HMRC and any market outside the UK designated in such an order, these stock exchanges are listed in Table 1. In the case of the jurisdictions in Table 2 the stock exchanges which meet recognised stock exchange status are those which are stock exchanges within the law relating to stock exchanges of that jurisdiction.
5. The term is often used in the phrase 'listed on a recognised stock exchange' or in similar or related expressions. The tables below therefore include the markets which meet the HMRC definition of ‘listed’ as set out in paragraph 6 below. While we try to maintain an up to date list this is not always possible because markets frequently rename, re-structure or merge. It is possible that you may identify stock exchanges within the law of a named jurisdiction (Table 2) which we have not yet identified, but which would meet recognised stock exchange status. Equally you may identify a market of a recognised stock exchange where we have not given an opinion as to whether it meets the HMRC definition of listed. If you meet either of these situations please contact HMRC using the contact points below.
6. The phrase 'listed on a recognised stock exchange' in respect of shares and securities is now defined at section 1005(3) ITA. This means shares and securities which:
   a) are admitted to trading on that exchange and
   b) included in the official UK list maintained by the Financial Services Authority (in its capacity as the UK Listing Authority) or are officially listed in a qualifying country outside the UK in accordance with provisions corresponding to those generally applicable in EEA states.
7. HMRC recognise that in certain cases markets use terms such as ‘listed’, ‘admitted to trading’, or ‘quoted’. Both Table 1 and Table 2 identify the markets which we consider would meet the HMRC definition of ‘listed’.
8. Certain HMRC legislation uses the term ‘dealt in on a recognised stock exchange’. For example, shares and securities ‘listed or dealt in on the UK or another recognised stock exchange’ is used in determining which assets are eligible for tax relief when giving or selling assets to UK charities. In such cases shares dealt in on the named stock exchanges should meet ‘dealt on a recognised stock exchange’ whether the shares are listed or not.
9. Section 48A (3) Finance Act (FA) 2005 requires ‘alternative finance investment bonds’ (Shari’a-compliant financial instruments commonly known as ‘sukuk’) to be listed on a recognised stock exchange. An alternative finance investment bond listed on an exchange recognised under section 1005 ITA will meet this requirement. In addition, certain other exchanges are designated only for the purposes of section 48A FA 2005. An alternative finance investment bond listed on such an exchange will meet the listing requirement in section 48A (3) FA 2005, but the exchange is not a recognised stock exchange for any other purpose. Designation has effect from 1 April 2007. Please see the table Recognised Stock Exchanges solely for the Purposes of section 48a(3)

• Table 1: Named Stock Exchanges designated as recognised stock exchanges for the purposes of section 1005 Income Tax Act 2007 (PDF 22K)
• Table 2: Recognised Stock Exchanges within the law of named jurisdictions for the purposes of section 1005 Income Tax Act 2007 (PDF 24K)
• Table 3: Stock Exchanges designated solely for the purposes of section 48A Finance Act 2007 (alternative finance bonds) (PDF 16K)

Contact for queries

Please email any queries to the following address: Recognised stock exchange queries

We would normally expect to reply by email, if that is your chosen method. However, the security of external emails cannot be guaranteed, so it is important for you to think about whether the risk of these email exchanges being intercepted is acceptable to you to correspond with us by email, following initial contact.

If you do not want us to reply to your original message by email, please advise us accordingly as soon as possible, and if necessary supply alternative contact details so that we can write to or telephone you as appropriate.

Please note we are unable to access emails marked 'Private'. If you have sent your enquiry this way, please resend as 'Normal'.

Alternatively you can write to:

Marion Williams
HM Revenue & Customs
CT&VAT
100 Parliament Street
London
SW1A 2BQ

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