STSM041100 - Exemptions and Reliefs: exemptions: Permanent Interest Bearing shares (PIBs)
Permanent Interest Bearing Shares (PIBS) are building society shares which count as capital. Being mutual institutions, building societies do not and cannot have a 鈥榮hare capital鈥� in the same way as public limited companies. Building society 鈥榮hares鈥� are effectively debt deposits carrying amongst other things limited voting rights and to the surplus of a Society on dissolution.
Section 109(1) of Building Societies Act 1986 exempts from stamp duty various instruments issued by building societies. This includes including 鈥渁ny transfer of a share in a building society鈥� (section 109(1)(b)) and 鈥榓ny other instrument whatsoever which is required or authorised to be given, issued, signed, made or produced in pursuance of this Act or of the rules of a Building Society鈥�.
Section 109(b) and (c) exempt building society shares and bonds respectively. Therefore the transfers of PIBS issued by a building society are exempt from stamp duty (and SDRT) and do not need to be stamped.