Stock transfer forms are the documents used to transfer shares in UK companies. They record the details of a share transfer – the buyer and seller, the number and type of shares and how much is being paid for them, otherwise known as the ‘consideration’.
There are two types of stock transfer form: the J30 form which is used for share transfers where shares are fully paid, and form J10 used to transfer shares which are unpaid or partly paid. The most common type of share transfer is for paid shares.
Do I need to notify Companies House of a share transfer?
Companies House does not need to receive a copy of the stock transfer form; however, the company registrar (usually a company director or the company secretary) should update the company register to record the details of the share transfer and also retain a copy of the stock transfer form along with any resolutions relating to the transfer.
Also, Companies House should be informed of the share transfer by filing a new Confirmation Statement (Companies House form CS01). Quality Company Formations provide a Confirmation Statement Service at a cost of £34.99 plus VAT. This service can also be purchased by existing customers from the Shop area within their Online Customer Portal.
Do I need to inform HMRC and pay stamp duty?
The reporting and tax requirements of HMRC with regards share transfers depends on the circumstances of the share transfer, as follows:
- Where share transfers have a sale value or ‘chargeable consideration’ of £1,000 or less, including shares that are gifted, i.e. for ‘nil’ consideration, HMRC do not need notified and stamp duty is not required to be paid; however, Certificate 1 on the rear of the share transfer form requires to be completed and signed.
- Where share transfers are classified as exempt of stamp duty, e.g. shares are left to someone in a will, HMRC do not need notified; however, Certificate 2 on the rear of the stock transfer form requires being completed and signed.
- If the share transfer value exceeds £1,000, and is not otherwise exempt of stamp duty, the transferee or new shareholder, will have to pay stamp duty at the rate of 0.5% of the sale value.
In this circumstance, the completed and signed stock transfer form together with the existing share certificate, should be delivered to HMRC’s stamp duty office (in Birmingham) for stamping within 30 days of the date of the transfer. HMRC can be paid by BACS transfer, online or by cheque. The stock transfer form and share certificate, should be accompanied by a covering letter. If payment is made online or by BACS transfer, you should provide the payment reference, and the amount and date paid.
HMRC will usually take between 5 to 10 days to process and return the stamped stock transfer form and share certificate, which should be sent to the company registrar (director or company secretary) who should update the company register and issue a new share certificate.
In some cases, there may be restrictions on the transfer of shares. It is therefore essential to check the articles of association and shareholders’ agreements (if applicable) before allowing the process to begin. Such restrictions may include pre-emption rights or obstacles to the directors’ power to authorise share transfers.