recognised stock exchange

Defined in section 841 of the Income and Corporation Taxes Act 1988 (ICTA) for corporation tax purposes (and for income tax purposes for periods before 2007-2008) and (for periods from 2007-2008) section 1005 of the Income Tax Act 2007 (ITA 2007) for income tax purposes, both as amended (with effect from 19 July 2007) by the Finance Act 2007, as any UK stock exchange that is a recognised investment exchange within the meaning of the Markets in Financial Instruments Directive (MiFID) and that is designated as a recognised stock exchange by HM Revenue and Customs (HMRC), and any stock exchange outside the UK that is designated as a recognised stock exchange by HMRC. The London Stock Exchange is a recognised stock exchange but securities traded on the AIM are not treated as being listed on a recognised stock exchange for UK tax purposes. The PLUS-listed market segment of the PLUS Markets is, from 19 July 2007, a recognised stock exchange but the other segments are not.

The term "recognised stock exchange" is used in a number of places throughout tax legislation and practice. For example, in the definition of close company in section 415 of ICTA, in the "quoted Eurobond" exemption from withholding tax in sections 882 and 987 of ITA 2007 and in the definition of investments that may be held in PEPs and ISAs. The value of a security traded on a recognised stock exchange will not, generally, need to be agreed with HMRC Shares Valuation Division before being used in a tax calculation.

HMRC has issued guidance on its approach to designating recognised stock exchanges. A schedule ()of the current recognised overseas stock exchanges is available on the HMRC website: .