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Stamp duty tax implications of transfering shares

Tax issues with transfer of shares on property company

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I am trying to establish what, if any, stamp duty implications there are from transfering shares at nil consideration from one LTD to another. 

The company with the shares currently has no direct assets, but it does have shares in other companies which own property. We are looking to transfer all these shares over to a new company but are unable on the tax implications on this and whether any stamp duty will become due.

If anyone can help out on this, it would be greatly appreciated.


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By The Dullard
09th Dec 2019 11:45

So, you're transferring shares in companies that have interests in land, rather than direct interests in land, meaning that you are, indeed, concerned with stamp duty, rather than stamp duty land tax.

Since there is no consideration (ie it's a gift), there cannot be any stamp duty.

If the transferor company is a close company there could be IHT implications if transferor and transferee are not 100% owned by the same individual (or their spouse).

There will definitely be CGT* implications.

* CGT is short form for corporation tax on chargeable gains.

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Replying to The Dullard:
By Calley
09th Dec 2019 11:54

Thank you for your comment, is very helpful.

The transferor and the transferee are both 100% owned by the same individuals, so am I correct in saying there will be no tax implication on the transfer?

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Replying to Calley:
By The Dullard
09th Dec 2019 12:54

No, if company A is a close company which owns X and it gives X to company B, the participators in company A have a chargeable transfer to the extent that the value of X doesn't arrive in any shares in company B that they (or their spouse) have in their estate.

Company A may also have made a gain on X.

Oh, and there's also the small matter of the distribution of company A's assets, with distributions ordinarily being tax as dividends on the shareholders.

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By Accountant A
09th Dec 2019 12:07

I would strongly advise you to take professional advice. You don't say what amounts are involved but the cost of getting things wrong can be substantial.

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By Tax Dragon
09th Dec 2019 12:43

I strongly agree with AA.

I'd further strongly advise you learn to read.

The Dullard said: There will definitely be [tax] implications.
You replied: Am I correct in saying there will be no tax implication…?

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Replying to Tax Dragon:
By The Dullard
09th Dec 2019 12:55

And you never know there might be a way of doing it without any tax implications.

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10th Dec 2019 10:08

'If anyone can help out on this, it would be greatly appreciated.'

Yes, an accountant can help on this, and can only do so after a proper review of all facts. There are all kinds of things to consider which you almost certainly have not considered as you very likely don't even know what they are. Hire an accountant.

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