Transfer of shares within a UK company.


According to Companies Act 2006, transferring shares is acceptable and the process is relatively simple and very clear.

Even though the law does not prohibit transferring of shares, however the article of association of the company may not allow it. It is therefore imperative that the article of association be examined before any decision is made. Let us now assume that the article of association does allow transfer of shares. The first thing we need to examine is whether the shares are going to be transferred as a donation or in return for payment.




Transfer without charge


In this case, it is very simple and straight forward; you need to fill out two documents: Return of allotment of shares and the Confirmation Statement. Alternatively, they can both be done while completing the Confirmation Statement.




Transfer for less than £1,000


Normally, when you buy shares you need to pay the stamp duty. However, this does not apply if the total of your purchase is less than £1,000 and you do not need to notify the HMRC. The steps you are required to make are the following:


  • Complete the Stock Transfer Form (make sure you have filled out the fields regarding exemption from stamp duty charge)

  • Send the above document along with the certificate of ownership of the shares to Companies House.


Following the above steeps, you will receive the new certificate of ownership for the shares.




Transfer for more than £1,000


In this case, you are required to pay the stamp duty charge which is based on chargeable consideration and this can be:

  1. cash

  2. shares or stock

  3. debt


The stamp duty charge is 0.5% of the total value.



EXAMPLE


If somebody buys shares using a share transfer document and pays £2,000, the stamp duty charge will be £2,000 x 0.5% = £10


Translated / Edited: Apostolia Nestoratou





© 2019 UPECO LTD



ATTENTION!


This article intends to give only a general informative picture and should not, in any case, be taken as a rule. It is strongly recommended to seek a full and professional guidance specifically for your circumstances before making any decisions.

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