Transfer of shares (stock) service

An issue of shares creates brand new shares in the company and allocates them to a new or existing shareholder. A transfer of shares moves existing shares from one person to another without creating any new shares. When new shares are issued, existing shareholders are diluted because the total number of shares in the company increases. When shares are transferred, the total number stays the same. Issuing shares requires an SH01 form filed at Companies House within 30 days, while a transfer is reported through a confirmation statement. Stamp Duty does not apply to a new share issue but does apply to a transfer where the total value is £1,000 or more.

A share transfer requires director approval, not necessarily shareholder approval. The directors must pass a resolution authorising the transfer at a board meeting, and minutes of that meeting must be formally recorded under the Companies Act. Whether shareholder approval is also needed depends on your company's Articles of Association. Some Articles include restrictions on share transfers, such as giving existing shareholders the right of first refusal. If your Articles contain such provisions, those must be followed before the transfer can proceed.

Yes, you can transfer shares without selling them. A common example is transferring shares to a spouse or family member as part of a tax planning arrangement. In these cases, no money changes hands. The transfer is made to restructure ownership, make better use of personal tax allowances, or improve dividend tax efficiency. The process is the same whether or not money is involved. A Stock Transfer Form must still be completed, and the relevant documentation must be prepared and approved by the directors.

Once the completed Stock Transfer Form is received, the company updates its internal register of members to reflect the new ownership. The directors formally approve the transfer at a board meeting, and minutes are recorded. New share certificates are then issued to the incoming shareholder showing their updated stake. If the transfer value is £1,000 or more, the form must be sent to HMRC within 30 days for Stamp Duty assessment. The company must also file a confirmation statement with Companies House to update the public record.

Companies House must be notified of every share transfer, but not immediately and not through a direct notification. The company is required to file a confirmation statement showing the updated shareholding structure. Until that confirmation statement is filed and processed, the old ownership details will remain on the Companies House public register. Updating the register is a legal requirement, and failure to do so means the change in ownership will not be officially recorded or publicly visible on the Companies House website.

Stamp Duty is a tax charged by HMRC on the transfer of shares above a certain value. It applies when the total value of the shares being transferred is £1,000 or more. When that threshold is met, the completed Stock Transfer Form must be sent to HMRC within 30 days of the transfer taking place. HMRC then issues a tax demand equal to 0.5% of the total transfer value. The person receiving the shares is responsible for paying the Stamp Duty. Transfers valued below £1,000 are exempt from Stamp Duty entirely.