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JGM
JGM, Solicitor
Category: Property Law
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Experience:  30 years experience in property law.
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I have a company law question re the transfer of shares-can

Resolved Question:

i have a company law question re the transfer of shares-can anyone assist?
Submitted: 11 months ago.
Category: Property Law
Expert:  JGM replied 11 months ago.
Can you explain your situation a little more?
Customer: replied 11 months ago.
re unpaid stamp duty
Expert:  JGM replied 11 months ago.
What would you like to know?
Customer: replied 11 months ago.
My understanding is that if stamp duty not paid transfer of legal title to shares cannot be recorded but that beneficial ownership (inc rights to receive dividends, return of capital etc) passes with payment for shares
Ie irrespective as to whether stamp duty is paid or not
Do you concur?
Expert:  JGM replied 11 months ago.
No, I don't agree. It is not lawful for a company to register a transfer of shares unless a duly stamped proper instrument of transfer has been delivered to it, or the transfer is an exempt transfer within the Stock Transfer Act 1982. This applies notwithstanding anything in the company's articles. So if the transfer can't be registered then there can be no ownership therefore the buyer can't benefit by way of dividends and can't sell the shares on.
Customer: replied 11 months ago.
right
i bought out my business partner several years ago-recently discovered that i omitted to pay stamp duty on the share transfer
i always have the option of waiting till it becomes an issue (likely never) then paying the duty plus penalty and interest (rather than stirring up a hornet's nest now)
my understanding is that if you pay the duty, penalty and interest hmrc are obliged to stamp the document, which surely validates any dividends paid in the intervening period as the stock transfer form bears the date of transfer way back when and hmrc have levied the penalty and interest on that basis?
what do you think
Expert:  JGM replied 11 months ago.
If the duty and penalty are paid then the transfer can be backdated, yes, and the transactions validated. I hope that helps. Please leave a positive rating so that I am credited for my time.
Customer: replied 11 months ago.
So just for absolute clarity paying the duty,penalty and interest at any point in the future provides me with an admissible document (stamped transfer) thus validating any transactions (dividends, sale of shares etc) between date of transfer per form (ie way back when) and date of stamping?
Expert:  JGM replied 11 months ago.
Yes, the transactions would be ratified.
JGM, Solicitor
Category: Property Law
Satisfied Customers: 10639
Experience: 30 years experience in property law.
JGM and other Property Law Specialists are ready to help you
Customer: replied 11 months ago.
Great-thanks for your help

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