How do I transfer shares in my company?

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This is a task that we see carried out all the time – and rarely is it done properly with the correct planning and considerations. And usually, price conscious people will try to do it themselves because they can. But it’s a bit like many things; just because you can, doesn’t mean you should!

The actual task of transferring shares is more a legal task than it is a tax one. It involves producing lots of paperwork and documenting the move of legal ownership of shares from one shareholder to another. Companies House need to be told and usually HMRC do, too. It’s important to understand whether the shares were initially allotted properly and fully – and what nominal values are attached to each.

The more complicated side is to do with tax. There are consequences affecting capital gains tax, inheritance tax and many more interconnected and important areas. These are the bits where it might take a couple of advisors from different backgrounds to consider the effect of a share transfer and how it impacts on the shareholders’ overall tax planning.

At MNE we’re happy to advise on share transfers and share restructures. As with all good advisors, sometimes we’ll bring in an expert if we think something has a legal or specialist tax complication. But trusting this with your accountant is a step we’d advise all businesses to take.

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man on laptop with coffee on deskCIS stands for Construction Industry Scheme.