A question on share transfers,If any-one know?

snowshine

As husband and wife couple bought few shares over the years.

Now the couple are ageing and not in need to cash any of their shares.
Can they transfer the ownership to their children who are still minors? or the shares have got to be sold and bought again in their children's name if they wish for those shares?

I know about married couples could transfer between themselves and the transfer forms are obtainable from company Registrar as well as one could transfer their shares to a charity.

Advice from any-one with the knowledge would be greatly appreciated.

Regards

Yorkie1

I suspect that minors cannot own the shares.

What is actual the reason for wanting to transfer the shares?

mulronie

Nothing in law stops children from owning shares, and nothing says a "gift" from parent to child has to be cash rather than an asset. For HMRC to consider the minor the beneficial owner, any shares would need to be gifted unconditionally and on the basis that the child would be sole beneficiary of any dividends and capital gains that would arise.

Some particular companies may not allow minors on their register, but equally some do. For instance Barclays are cool with it

Check with the registrar.

xylophone

The shares can be gifted to the minor children by the parent as an absolute gift - some registrars will allow the shares to be registered in the child's own name but others will only allow them to be held on behalf of the child by an adult.

If it is desired to make an absolute gift then this should be made clear in any paperwork - the income will then belong solely to the child.

In effect the parent holds the shares in bare trust for the child.

It is important to remember that where a parent has made an absolute gift to an unmarried minor child, any income in excess of £100 per annum will be taxed as that of the donor parent, even though it belongs to the child. The £100 would include income arising on all and any gift made to the child by the parent (except within tax privileged schemes like CTF/JISA).

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem4300.htm

http://www.pearson.com/investors/shareholder-information/faqs/shares-and-shareholding.html might be of interest as an example - if the shares are designated as suggested, it needs to be formally recorded that the shares have been gifted and belong to the child- otherwise, there is the risk that they will be regarded as still belonging to the donor.

It would be advisable for the parents to take advice from a solicitor particularly if large sums are involved?

gadgetmind

Also note that the transfer will be viewed as a disposal for capital gains tax purposes. We don't know value of shares, or acquisition date/time, all of which are essential when working out the gain.

snowshine

xylophone wrote: »

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem4300.htm

http://www.pearson.com/investors/shareholder-information/faqs/shares-and-shareholding.html might be of interest as an example - if the shares are designated as suggested, it needs to be formally recorded that the shares have been gifted and belong to the child- otherwise, there is the risk that they will be regarded as still belonging to the donor.

It would be advisable for the parents to take advice from a solicitor particularly if large sums are involved?

Thank you for the above. That is very helpful link.

Share vales are nothing significant and will not have any gains made at this present climate-in fact it is loss.
We do not wish to sell it either.
Just in the process of planning to write a "WILL" and in its planning a thought came to mind if we could transfer as absolute gift.

Thank you all for your input.
Regards