Depository receipts (DRs) are used as substitute instruments indicating ownership of securities such as shares and they enable investors to hold and deal in shares of companies located in countries other than their own. Such activities might otherwise be inhibited by difficulties in transferring original share certificates from one country to another. The investors hold or trade the DRs rather than the share certificates themselves.
HMRC have issued guidance on the treatment of DRs for capital gains tax purposes1. Where a DR is issued in the UK the HMRC view is that the holder is the beneficial owner of the underlying shares. Therefore, a transfer of shares by a shareholder to a depository in exchange for an issue of DRs is not a disposal of
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