This is the first part of the company shares transfer guide, it includes how to complete the share transfer form and the payment of any stamp duty to HM Revenue and Customs.
A share transfer form is used for the transfer of shares, you may also see it referred to as a form J30 or a stock transfer form.
Here is a quick summary of the share transfer procedure:
- Seller of shares completes and signs share transfer form
- Buyer signs share transfer form (when necessary)
- Share transfer form sent for stamping and stamp duty is paid (if required)
- Company receives and checks the transfer documents
- Board of Directors decide whether to approve the transfer
- Company updates its statutory registers, cancels share certificate(s) and issues new certificate(s) required
- Transfer is confirmed to Companies House as part of a confirmation statement
We will now provide more detail about the first three steps of the share transfer procedure.
1) Seller of shares completes & signs share transfer form
The seller of the shares should complete the share transfer form with details including name, address and the shares to be transferred, then sign it. The name and address of the share buyer also needs to be included on the share transfer form but will not usually need to sign it.
It is important to ensure the form details are correct as this is how they will appear on the company’s statutory records. For every class of share transferred, a separate share transfer form should be completed.
Click the following link to download a free share transfer form template (J30) J30-Stock-transfer-form.pdf (104 downloads)
2) Buyer signs stock transfer form (when necessary)
The share buyer does not usually have to sign the stock transfer form unless shares are unpaid or partly paid. If shares are, they bring a liability for the unpaid amount to be paid to the company once due. So, the share buyer must sign to state they accept that liability, whether by purchase or by gift.
The buyer should receive the share certificate from the seller showcasing the share transfer details. This will therefore allow the buyer to check the details entered by the seller on the share transfer form, especially number of shares and consideration. Unpaid or partly paid shares are transferred using form J10 rather than form J30.
Click the following link to download a free share transfer form template (J10) J10-Stock-transfer-form.pdf (121 downloads)
3) Share transfer form sent for stamping & stamp duty paid (if required)
If stamp duty is payable, you will first need to send the stock transfer form to HM Revenue & Customs for stamping at the following address:
Stamp Duty, Birmingham Stamp Office, 9th Floor, City Centre House, 30 Union Street, Birmingham, B2 4AR
For stamping you need to include:
- Completed share transfer form
- Payment of stamp duty, via UK cheque or international money order made payable to “HM Revenue and Customs”
- An address for stamped share transfer form to be returned to
Stamp duty is paid if the consideration value is more than £1, 000, whether cash is provided or some other form of consideration, for instance services instead. The certificate signee must confirm that the transaction does not form part of a larger transaction or even a series of transactions which total exceeds £1, 000, (you cannot avoid stamp duty). The current rate for stamp duty is 0.5% of the consideration value and is rounded up to the nearest £5.
If you pay £1,500 for some shares, stamp duty will be payable as the consideration is well above £1,000. 0.5% of £1,500 is £7.50, which rounded up to the nearest £5 would mean £10 would be payable in stamp duty.
Some share transactions can qualify for reliefs or exemptions that can reduce or eliminate the stamp duty payable. You have 30 days after the share transaction to pay the stamp duty that’s due. Failure to pay may result in penalties and interest applied to the amount. For more information about stamp duty on shares click here.
In Part 2: How to Transfer your Company Shares we explain more information about the share transfer process, at the point the company becomes really involved.