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Share Transfer Question

  • 18-08-2004 8:55pm
    #1
    meatball
    Closed Accounts Posts: 90 ✭✭


    Let's say I have a friend in a company that will soon be floating, and they are offering shares to members of the company only. I would like to give him money to buy shares which he would then transfer to me after the company floats. What would be the legal/tax consequences of this scheme?


Comments

  • #2
    Blackjack
    Registered Users, Registered Users 2 Posts: 3,628 ✭✭✭Blackjack


    It really depends on which Countries exchange is the company planning to List on.
    If it's Ireland, then it should be fairly OK (once any ownership restrictions, if any, are lifted) to transfer the shares from your mates name to yours. Stamp Duty payable at 1% of the value of the shares on the stated trade date for the transfer.
    Probably most importantly is that your check out the Capital Gains tax liability. AFAIK, if your mate gets the shares for Free as part of the flotation, then he'll probably have to pay 20% on the value of the shares (I believe over and above euro1270, but you will need to check that further). For example if you buy 3270 worth off him, he could be liable to pay 20% CGT on the 2000 - being 400 Euro. You could try the Gift option (ie he states these are a Gift) but then you would be liable to pay the CGT (I think).

    If it's in the UK, pretty much the same, except the Stamp duty is 0.5%.
    You can get the relevant forms required from most stockbrokers or Registrars websites.

    The below website may help with stock transfers and a bit more info, but a quick google for "Stock Transfer form" will give you quite a bit more

    [HTML]http://www.capita-irg.com/CompletingStockTransferForm.html[/HTML]


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