Transfer of Shares

Transfer of Shares

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Husband operates as an insurance salesman through Limited Company. Incorporated in April 2004.

There are 100 shares issued, 50 in name of husband, 50 in name of husband and wife.

Divorce proceedings have commenced although still living together.

Husband wants to transfer shares in joint names into his name.

What is procedure for transferring these shares, and what consideration would bw payable.

John

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By AnonymousUser
02nd Apr 2007 16:53

No payment needed, and share transfer form but act quickly
The amount to be paid for the transfer may be anything they choose but Stamp Duty will be payable unless the transfer to sole name is by way of gift. You will need a share transfer form (available from legal stationers I believe, or you may be able to download one from internet). If the transfer is a gift, tick the appropriate section on the back - it used to be "inter vivos gifts". The company will also have to make a return to Companies House regarding the change on shareholders.

For capital gains purposes, the price paid is irrelevant PROVIDED THAT the transfer is in the same tax year as the couple cease to live together as man and wife. On the basis of what you have told us, a transfer after 5 April 2007 may be treated as not between such a couple and therefore at arm's length so you could get into valuation issues in respect of both gifts or the actual value paid. If made in same tax year as ceasing to live as man and wife it is a no-gain: no loss transaction but you may still need to disclose it on the tax return.

For IHT purposes transfers between spouses before decreee absolute are exempt from IHT.

There are quite a few issues and planning points here so I recommend that you read the appropriate chapter on separation and divorce in a suitable tax textbook.

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