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Stamp duty on shares

 

Buy shares for more than £1000

If you buy company shares (also known as stocks) for the consideration of more than £1000, stamp duty of 0.5 per cent is payable to UK tax office, the HM Revenue and Customs (HMRC).

Consideration referred to above can be in cash, other stock or shares or debt.

The procedure is to send the stock transfer form to HMRC for stamping together with the stamp duty payable. See below on how to calculate stamp duty payable to HMRC.

How to calculate stamp duty

You pay stamp duty on the amount paid for the shares transfers at the rate of 0.5 per cent, rounded up to the nearest £5 on each document to be stamped by HMRC.

Example

Good Luck Company Limited

Mr. Luck bought 100 shares from Mr. Good for £2350. The stamp duty payable is £2350 x 0.5 per cent  = £11.75 and rounded up to the nearest £5, the stamp duty payable is £15.

Buy shares less than £1000

No stamp duty is payable if you buy shares for less than £1000 and you do not require to send the stock transfers form to HMRC for stamping.

In this situation, you have to do the following:
Complete the first exemption certificate on the back of the stock transfer form. You do not require filling in this certificate if you do not pay anything for the shares.

if your shares transfers was agreed or signed before 13 March 2008, it will need to be stamped by HMRC and stamp duty is payable as per buying shares for more than £1000.

The changes of shares ownership must also be communicated with Companies House and it can be done by filing annual return with the updated shareholders information.

Feel free to contact Concise accountants if you require help on UK company shares transfers matters.

Exemptions

Stamp duty reliefs available for consideration you give for the shares which considered not chargeable. Visit www.hmrc.gov.uk for more details.

Lastly ensure the details printed on your share certificate are correct.

Concise Accountancy – Making company shares transfers simple for businesses

 
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