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Stock transfer form

A stock transfer form transfers shares from one person to another. 

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A stock transfer form is a document that is required for the transfer of shares in the United Kingdom.

Parties to the transfer

The registered holder is the current shareholder, or for a joint shareholding, all joint shareholders. The recipient (or recipients for proposed joint shareholdings) is the person(s) in whose name(s) the shares are now to be registered. 

Undertaking company

The undertaking company is the private limited company in which the shares are held. 

Consideration 

Consideration is the value exchanged between parties to make an agreement binding. In this case, the consideration is the money being paid in return for the shares.

Stamp duty is a statutory tax payable on the transfer of shares by stock transfer form. As of April 2020, stamp duty is chargeable on transactions over £1,000, at a rate of 0.5% of the sale price.

If the transfer is exempt from stamp duty, or no chargeable consideration is given for the transfer, you'll need to complete one of the certificates on the back of the stock transfer form - Certificate 1 or Certificate 2. What certificate is completed will depend on the consideration being paid for the shares. 

Certificate 1

Certificate 1 should be completed if the consideration being paid for the shares is £1,000 or less. If this is the case, then no stamp duty is due on the transaction.  

Certificate 2

Certificate 2 should be completed if the consideration being charged for the shares is not chargeable or an exemption applies. 

Instances where consideration is not chargeable

Where the recipient is:

  • receiving the shares as a gift

  • receiving the shares from their spouse or civil partner

  • a trustee receiving the shares held in a trust from another trustee

  • receiving the shares from a liquidator who is winding up a business

  • being transferred the shares as security for a loan

  • receiving the shares back after they'd been held as security for a loan

  • a beneficiary of a trust and the trust is being wound up

Exemptions

  • The shares have been left to the recipient in a Will

  • The shares are being transferred to the recipient as a result of a divorce or the dissolution of a civil partnership

  • Certain types of stock, eg loan notes or bonds are being transferred

If any of these apply, then no stamp duty is due on the transaction. 

Relief

There are some share transfers that qualify for relief to reduce the amount of stamp duty due - to 'nil' in most cases. Neither Certificate 1 nor Certificate 2 will need to be completed in these instances, however, you’ll still need to send the stock transfer form to HMRC (together with details of the relief), so that they can consider your relief claim. 

Enquiries

If you're not sure whether your transaction is exempt from stamp duty, or if you think you may be entitled to relief from Stamp Duty, you can contact the HMRC Stamp Taxes Helpline on 0300 200 3510. Alternatively, visit www.hmrc.gov.uk/sd for more information.

If stamp duty is payable, then the stock transfer form must usually be sent to HMRC to be stamped. However, due to the effects of the COVID-19 (Coronavirus) pandemic, stock transfer forms are currently not being stamped by HMRC.

COVID-19 (Coronavirus) 

You should not post your completed Stock Transfer Form to HMRC. Instead, email your stock transfer form to stampdutymailbox@hmrc.gov.uk.

  • Stamp duty must be paid before HMRC can process the Stock Transfer Form.

  • Once HMRC have checked the stock transfer form and confirmed they have received payment, they will send an email including a letter that will (i) confirm receipt of stamp duty (ii) detail the transactions they are confirming receipt for and the reference codes and (iii) give assurance that HMRC will not pursue a penalty against the registrar of the undertaking company for registering the new ownership of the shares. 

  • This letter must be forwarded to the registrar of the undertaking company, together with the Stock Transfer Form and the share certificate. 

  • The registrar will then issue the recipient with their own share certificate.

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