Completing a stock transfer form
A stock transfer form transfers shares from one person to another. If you use a stock transfer form to buy stocks and shares for £1,000 or less you do not normally have to pay any Stamp Duty.
Completing the form
When you complete a stock transfer form you need to give all the details of the sale including the buyer, seller, value of the shares that is paid in cash or other stock and shares or by way of a debt, the shares being transferred (the quantity, class and type, for example 100 ordinary shares, ABC Limited)
Enter ‘Nil’ as the consideration if you do not give any payment for the shares. If you give consideration other than in money for the shares, state what you have given.
If the transfer is exempt from Stamp Duty, or no chargeable consideration is given for the transfer, you need to complete one of the certificates on the back of the stock transfer form. You need to complete a different certificate depending on what you paid for the shares.
You should complete certificate 1 if consideration you give for the shares is £1,000 or less; the transfer does not form part of a larger transaction or series of transactions where the total exceeds £1,000.
You should complete certificate 2 on the back of the form if the transfer is exempt from Stamp Duty, for example, transfers in connection with divorce or the dissolution of a civil partnership; the consideration given is not chargeable consideration
No certificate is needed when no consideration is given for the shares or if you’re claiming relief from Stamp Duty.
When you email your stock transfer documents to be processed you must pay the correct amount of Stamp Duty, this may include penalties and interest payments. If you’re not sure of the amount to pay you can ask HMRC for their opinion on the amount due in your email.
How to get your form stamped
Due to the temporary measures put in place to stop the spread of coronavirus (COVID-19), you should only email an electronic copy of your stock transfer form or instrument of transfer (for example, a scanned PDF) to HMRC at firstname.lastname@example.org.
The form must be fully completed, signed and dated (use power of attorney if necessary). HMRC will accept e-signatures while coronavirus (COVID-19) measures are in place
You must also include electronic versions of any agreement and supporting documents if HMRC has given a formal opinion or adjudication on how much Stamp Duty you should pay.
You can also email an electronic version of form SH03 to notify HMRC of the purchase of own shares by a company at email@example.com.
If you have already posted your instruments you should resubmit your notification electronically and include the details of any payments you have made in respect of that notification. If you do not resubmit your notification electronically, your instruments will not be assessed or returned to you until temporary coronavirus (COVID-19) measures end.
The Stamp Duty must be paid before HMRC can process the stock transfer form. If you email notification without paying the Stamp Duty HMRC will contact you by email before they progress your notification
You should allow HMRC 20 working days to give them time deal with your form.
Errors that cause delays or rejection of the application
- the stock transfer form is not dated
- Stamp Duty is not rounded up to the nearest £5 on each document
- consideration value is not shown on the form – remember that if shares are given as consideration you’ll need to give the value of the shares
What happens next
Once HMRC has checked the form and confirmed receipt of payment they will send you a letter that will confirm receipt of Stamp Duty, detail the transactions we are confirming receipt for and the reference codes, give assurance that HMRC will not pursue a penalty against the Registrar for registering the new ownership of the shares
You must send it to the registrar of the company you have bought shares in along with the stock transfer form and share certificate. The registrar will then issue you with your own share certificate. If you’re submitting a form SH03 to Companies House, you should include a copy of the letter with the certificate.
Same day stamping service
The ‘same day’ stamping service is only available in exceptional circumstances, such as unexpected or unforeseen circumstances when it’s essential to have a document stamped immediately. You must email requests for the same day’ stamping service to: firstname.lastname@example.org
If you become aware that a transaction may need a stock transfer form stamped at short notice, you should email: email@example.com giving as much detail as possible, including the number of stock transfer forms to be stamped, specific reason or reasons for the request and the amount of Stamp Duty
Reliefs and exemptions
There are some share transactions that qualify for reliefs or exemptions. They can reduce the amount of Stamp Duty you pay or are exempt from Stamp Duty altogether.
If you pay too much Stamp Duty on a transaction you may be able to claim a refund within 2 years of the date of the stamped document. If the document is undated, a refund can be claimed within 2 years of first execution. The Stamp Office will email you if they need more information to support your claim. If your refund is agreed upon, the Stamp Duty will be repaid, usually with interest, from the date, the tax was paid.
If the refunds you’re applying for is £150,000 or more you can ask for payment by CHAPS electronic transfer. You’ll need to include your bank details with your claim.
UK shares bought from abroad
If you buy shares in a UK company while you’re abroad, you still have to pay Stamp Duty, and get the transfer documents stamped. If you do not do this within the time limits you may have to pay a penalty and interest.
If you buy foreign shares you do not have to pay Stamp Duty. If however you bring a document which transfers shares into the UK there could be a charge to Stamp Duty. There may be other foreign taxes to pay.
For expert assistance regarding HMRC advice contact firstname.lastname@example.org or WhatsApp us on 07583452230 and we can connect you to the right professional. Visit www.bizlawuk.co.uk to find out more about how we can help you with our other services. If you find this information useful, please follow our social media platforms, like and share.