Hi Everyone,
A bit of a simply question for many here but I just want to confirm my understanding of the process of transferring shares between one shareholder and another.
I have one shareholder transferring shares to another shareholder.
As the shares are worth less than £1,000 I simply get the shareholders to fill out a stock transfer form on paper for the company records and then simply let companies house know on the annual return.
If the value of the shares transferred were greater then £1,000 then stamp duty tax would be incurred and HMRC would have to be informed.
Simples.
But has anyone spotted any holes in my process?
Replies (3)
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Not forgetting
To obtain the share certificate for cancellation. Obtain indemnity if not done.
Cancel old cert.
Issue new cert.
Update stat books.
Online stamp duty calculator
http://sdccalculator.hmrc.gov.uk/SDSSMain.aspx
Inputting consideration (price paid) of £1,001.00
gives £5 stamp duty if "Non paper (Stamp Duty Reserve Tax)"
or £10.00 stamp duty if "Paper (stamp Duty)".
Therefore you should see if the transaction qualifies as "Non paper (Stamp Duty Reserve Tax)" to reduce the stamp duty cost. I'm sure HMRC somewhere should provide an easy definition of this and I'm sure HMRC website should make finding this definition easy.
Whilst the HMRC stamp duty website specifically talks about using consideration (price paid) rather than market value for stamp duty purposes, a different rule applies for Capital Gains Tax where market value is used.