Issue new shares - stamp duty

Issue new shares - stamp duty

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We have a company with 5,000 £1 shares.
When we set up we took 1000 shares, leaving 4000.
We have someone wanting to buy some of those remaining 4000 shares.
Do we need to get them "stamped" and pay duty on them?
It is so long since I did this that i cannot remember!
Thanks for helping this gap in my memory,

David

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By kenmoody
09th Jan 2008 13:03

Do you really want to do that?
I mean if the company issues the shares presumably they are worth more than par value, so the company will get £X and will need to create a share premium account for the excess.

However, if the existing shareholders sold some of their shares they would get the money and now is the perfect time to cash in on their business asset taper relief! If the company needs the cash injection they can lend the money to the company - and draw it out again of course tax free.

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By User deleted
04th Jan 2008 14:13

It depends on how they are being paid for..
If the shares are being sold for a cash consideration then no stamp duty is payable on the issue. All you need do is:

* Produce a directors resolution/minute approving the issue
* Update the company's statutory registers
* Issue share certificate
* File form 88(2) with Companies House

However if the shares are being issued for a non-cash consideration then as well as the above you will also need a form G88(3) which may require the payment of stamp duty.

Generally stamp duty is paid only on transfers of shares not allotments.

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By User deleted
06th Jan 2008 10:55

Sarah

What about form 42 and the reporting implications?

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