A Stock Transfer Form, also known as a Share Transfer Form, shall be used to record the transfer of ownership of shares in any private or public limited company registered in England, Wales and Scotland.
According to Section 770 of the Companies Act 2006 a company may not register a transfer of shares unless a ‘proper instrument’ has been delivered to it.
A ‘proper instrument’ can take a variety of forms and may be subject to the company’s Articles of Association. The Model Articles of Association contained in the Companies Act 2006 state that "shares may be transferred by means of an instrument of transfer in any usual form or any other form approved by the directors, which is executed by or on behalf of the transferor".
Therefore there is no prescribed form for transferring shares and, as long as certain information is included in the form, there is no statutory requirement to use a particular form or template. However, the most common form is the Stock Transfer Form as set out in schedule 1 of the Stock Transfer Act 1963.
This Stock Transfer Form template has been updated following the changes introduced by HMRC on 6 April 2012. It complies with schedule 1 of the Stock Transfer Act 1963 and contains TWO FORMS, Form J10 and Form J30.
Please note that you can only use Form J10 and Form J30 above if you hold a share certificate.
INSTRUCTIONS TO COMPLETE THE FORMS
The Transferor (original owner) will have to:
Provide full name and address;
Provide name of the company ('Name of Undertaking') in which the shares are held;
Provide class of share (e.g. ordinary shares/preference shares etc.);
Provide amount to be transferred in both words and figures;
Sign the form and give it to the transferee (new owner) together with the share certificate;
Receive payment (if any).
The Transferee (new owner) will have to:
Provide full name and address;
Fill in the section on Stamp Duty if applicable (see below for further information). If no Stamp Duty is due, the transferee must sign and date the exemption certificate of the Stock Transfer Form. If Stamp Duty is payable the transferee must send the Stock Transfer Form to HMRC for stamping. The form must be sent for stamping within 30 days from the date the form is signed. The transferee will receive the stamped form back from HMRC.
Send the completed (and, is applicable, stamped) Stock Transfer Form and share certificate to the Registrar of the company.
Finally, once the company has received the completed Stock Transfer Forms and the share certificate it will cancel the old share certificate and issue a new share certificate to the transferee which then becomes the new shareholder.
N.B. When the company issues the new share certificate it is a legal requirement to update the company's Register of Transfers and Register of Members immediately.
Stamp Duty is a statutory tax payable if more than £1,000 has been paid for the shares. Any payment under this figure or if no money has been paid, for example a gift, then the transaction is exempt from Stamp Duty.
In other words, if you buy shares for £1,000 or less you don't normally have to pay any Stamp Duty but if you buy shares for more than £1,000 then you have to pay Stamp Duty.
The amount of Stamp Duty you pay is based on the consideration you give for the shares; the consideration can be cash, other shares or even debt (e.g. loan stock). Stamp Duty is chargeable at a rate of 0.5% of the sale price, rounded up to the nearest £5 on each Stock Transfer Form to be stamped.
There are some share transactions that qualify for relief that can reduce the amount of Stamp Duty you pay. And there are some that are exempt from Stamp Duty altogether. HM Revenue & Customs provides guidance on the Stamp Duty on shares which can be found at: http://www.hmrc.gov.uk/sd/shares/sharetransfers.htm#12.
N.B. On 6 April 2012 HMRC revised the Stock Transfer Form and added a new certificate to the reverse of the form. This Stock Transfer Form (Form J10 & Form J30) has been created reflecting the changes introduced and must be used for all transfers of shares carried out on or after the 5 September 2012, as the transition period under which old versions of the form were accepted ended on that date.
This Stock Transfer Form (Form J10 & Form J30) is written in plain English, easy and ready to fill out.