Stock Transfers Made Simple

A guide to managing stock transfers made on and off Vestd

Your Complete Guide to Stock Transfers on Vestd

Whether you’re gifting 🎁 or selling shares 💸, keeping your company’s records accurate and compliant with HMRC is essential. On Vestd, you can manage both new stock transfers and previous transfers completed off-platform. This guide will walk you through everything you need to know, so you can get it done quickly and confidently.

Plus, we’ve included a handy tutorial video 🎥 to show you exactly how to complete stock transfers on the platform! Let’s dive in and make your stock transfer hassle-free. 🚀

Contents 📋

1. What is a Stock Transfer Form (STF)?
2. How to Prepare for a Stock Transfer
3. What is Stamp Duty?
4. How to Pay Stamp Duty for a Stock Transfer
5. Steps to Complete a Stock Transfer on Vestd

1. What is a Stock Transfer Form (STF)?

A stock transfer form (STF) is a legal document used to record the official transfer of shares from one shareholder to another within a Private Limited Company (PLC). Unlike issuing new shares (which can dilute the company’s ownership structure), this process involves transferring existing shares without altering the total number of shares in the company.

The STF ensures the transfer is properly documented and compliant with legal requirements. (It’s different from electronic transfer systems like CREST.)

What makes up a Stock Transfer Form?

Here are the key components:

• Parties to the Transfer: Identifies the transferor (current shareholder) and transferee (recipient of shares).
• The Company: Specifies the company whose shares are being transferred.
• Description of Shares: Includes the share class (e.g., ordinary shares, growth shares) and the number of shares.
• Consideration: Details the value exchanged for the shares (cash, property, or other assets).

2. How to Prepare for a Stock Transfer 💡

Before getting started, here’s what you’ll need:

• Details of the transfer: Share class, number of shares, and total price (consideration).
• Transferor and transferee information: Ensure their addresses are up to date.
• Stamp Duty payment: If the total value exceeds £1,000, stamp duty is payable at 0.5% (rounded up to the nearest £5). The transferee (buyer) is responsible for paying this to HMRC and uploading the payment receipt.

3. What is Stamp Duty? 💰

Stamp duty is a statutory tax applied to share transfers when certain conditions are met. Here’s what you need to know:

When Does Stamp Duty Apply?

• Stamp duty is payable if the chargeable consideration (e.g., cash, debt, or securities) exceeds £1,000.
• The tax is calculated at 0.5% of the chargeable consideration, rounded to the nearest £5.

Examples:

• £1,000 or less: No stamp duty is payable. Complete Certificate 1 on the STF.
• Over £1,000: Stamp duty applies. The STF must be sent to HMRC for stamping.

When Is Stamp Duty Not Payable?

Stamp duty doesn’t apply in these situations:

• Gifts: The shares are being transferred with no consideration (e.g., no payment).
• Non-chargeable consideration: The value exchanged isn’t cash, debt, or securities (e.g., property).
• Exemptions: Transfers may qualify for exemption, such as:
  • Between spouses or civil partners.
  • As part of a will or inheritance.
  • To a charity.

Certificates: What You Need to Complete

If stamp duty isn’t payable or the consideration isn’t chargeable, you’ll need to fill out one of these certificates:

• Certificate 1: For chargeable consideration of £1,000 or less.
• Certificate 2: For non-chargeable consideration or when an exemption applies.

If no consideration is provided, no certificate is needed.

The certificate isn't a separate document but is included as part of the stock transfer form (STF). It’s typically found on the same form, in a designated section where you indicate whether stamp duty applies.

4. How to Pay Stamp Duty for a Stock Transfer 💸

Paying stamp duty is simple. Here’s how:

Step 1: Calculate the Stamp Duty 🔢

• Stamp duty is charged at 0.5% of the chargeable consideration, rounded to the nearest £5.

Step 2: Pay Stamp Duty Online 🌐

• HMRC accepts payment via bank transfer, Bacs, or CHAPS.
• Include your company name and transfer date as the payment reference.

Step 3: Submit the STF to HMRC 📧

• Scan and email the signed STF to stampdutymailbox@hmrc.gov.uk.
• Attach proof of payment and any additional documents.

Step 4: Receive Confirmation from HMRC 📢

• HMRC will send a letter confirming receipt of payment.
• They will stamp the STF (electronically or physically).

Step 5: Upload to Vestd 💻

• Log into your Vestd account.
• Navigate to Share Capital > Stock Transfers and upload the stamped form.
• Vestd will handle the rest and keep your records up to date.

5. Steps to Complete a Stock Transfer on Vestd 🏃

Step 1: Log In and Start

• Log into your Vestd account.
• Navigate to Share Capital > Stock Transfers in the side menu.
• Choose Create a New Transfer or Record a Previous Transfer.

Step 2: Enter Transfer Details ⌨️

Here’s what we’ll need:

1. Share class: Select the class of shares being transferred.
2. Transferor (from): Choose who is transferring the shares. (If their name isn’t selectable, check their address under People & Communication > Shareholders.)
3. Transferee (to): Select the recipient. (If they’re not listed, click Add a Shareholder and provide their address.)
4. Number of shares: Specify the quantity being transferred.
5. Total price: Enter the value of the shares (cash consideration).
6. Confirm whether the consideration exceeds £1,000.00 in aggregate: This lets the platform know whether Stamp Duty is payable

Step 3: Governance Checks 🔄

Depending on your company’s governance requirements, you may need resolutions to authorise the transfer. Vestd makes this simple:

• Generate new resolutions: Create fresh resolutions directly on the platform.
• Upload signed resolutions: Use existing documents you’ve prepared.
• Select from existing company documents: Reuse resolutions already uploaded to Vestd.

Step 4: Document Management 📄

Vestd will prompt you to:

1. Upload/Generate the Share Purchase Agreement (SPA) 
2. Generate the Stock Transfer Form (STF).

Step 5: Review and Confirm ✔️

• Check the stock transfer summary for accuracy.
• Make any necessary changes.

Step 6: Start the Stock Transfer 🚀

• For new transfers: Documents (resolutions, SPAs and STFs) are sent for digital signatures via DocuSign.
• For previous transfers: All relevant documents would have been uploaded in the previous step.
• Click Start the Stock Transfer.

Step 7: Upload Stamped Form 📂

1. Once the resolutions and SPAs have been signed, you can upload your stamp duty confirmation form (if required).

If stamp duty applies:

1. Receive the stamped STF and confirmation from HMRC.
2. Log into Vestd and navigate to Share Capital > Stock Transfers.
3. Select the relevant transfer and click Upload Stamp Duty Confirmation Form.
4. Once uploaded, Vestd will finalise the transfer and update your cap table automatically.

FAQs and Support 👋

If you have any questions or need assistance, our friendly Customer Success team is here to help. Email us at support@vestd.com, and we’ll make your stock transfer experience as smooth as possible.

Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal, tax or financial advice.'