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Share transfers and stamp duty exemption

Share transfers and stamp duty exemption

I have a client who needs to transfer shares in two companies to a new holding company. In company A, the shares are owned 50/50 by husband and wife. In company B, wife owns both issued shares.

From a stamp duty perspective, my understanding is that stamp duty relief (section 77 of the Finance Act 1986) can only be claimed where the before and after shareholding proportions in the target and new hold co are the same. 

I was therefore wondering if one of the shares in company B can be deemed to held in trust for husband or could now be gifted to husband on a "no gain no loss" basis (making it a 50:50 company too). If so, I think the stamp duty exemption may be possible. If not, I think stamp duty will probably be payable on the transfer of the shares in company A and company B and at a pre-money valuation of the group of roughly £800k this makes stamp duty of roughly £4k payable.

All help greatly appreciated!


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10th Aug 2012 14:13


I am not sure that your "one share held in trust" idea will work. However, the option of trasnsferring one share should be okay.

Failing that one approach in this situation is to do the two transactions sequentially. Relief can be claimed on the first (the higher value one naturally) but not on the second.

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