02 April 2020

HMRC temporarily accept electronic stock transfer forms and form SH03s due to COVID-19

Typically, in order to effect a transfer of shares or a company’s purchase of its own shares, buyers, companies or their solicitors would need to send the signed and dated stock transfer form(s), SH03 or other instrument to HMRC at the Birmingham Stamp Office, together with a cheque made payable to HMRC (or confirmation of an electronic transfer thereto) for the requisite amount of stamp duty (0.05% of the share consideration). Once the stock transfer form or Form SH03 has been stamped, HMRC would return it to the sender in order for it to be lodged with the company for registration and/or Companies House.  

The Office of Tax Simplification (“OTS”) had been asked to commence a review of stamp duty on paper transactions in the 2016 Autumn Statement with a view of simplifying the above process from a technical and administrative perspective. The review would not cover Stamp Duty Reserve Tax or Stamp Duty Land Tax more widely. In a recent progress report, the OTS advised that responses indicated a preference to move to a digitalised system for stamp duty and the abolition of paper and physical stamping. Advisers and businesses had been asked to answer certain questions and provide comments and we await the conclusion of the OTS report.  

However, in light of COVID-19, the following new temporary measures have been put in place to prevent the risk of COVID-19 spreading, and such measures will remain in place whilst COVID-19 countermeasures are in place generally in the UK:

  1. If the transfer of stocks or shares is £1,000 or less, you do not normally need to pay any Stamp Duty.

  2. Businesses and/or advisers should not post stock transfer forms to the Birmingham Stamp Office but instead email an electronic pdf version of the fully completed, signed and dated stock transfer form to [email protected]. Whilst COVID-19 measures are in place, HMRC will also accept the use of e-signatures. If you cannot get your stock transfer form signed and dated, it is recommended that you email HMRC at the above email address.  

  3. You must include electronic versions of any agreement and/or supporting documents to HMRC at the above email address if HMRC has given a formal opinion or adjudication on how much Stamp Duty you should pay. If relief if being claimed, you need to send the completed, signed and dated electronic stock transfer form, together with the details of relief you’re claiming, to HMRC. If the instrument of transfer used to effect the transfer is not a stock transfer form, you should only send the relevant part of the instrument that effects the transfer. 

  4. Stamp Duty must be paid prior to HMRC processing any applications using Faster Payment, BACS or CHAPS. It is recommended that the covering email attaching the electronic stock transfer form(s) and/or Form SH03 includes a confirmation that such payment has been made. HMRC account details can be found on the Government website. 

  5. In respect of a company’s purchase of its own shares, Companies House Form SH03, which also requires stamping, may also be emailed electronically to HMRC at [email protected].

  6. If you have already posted your instruments to the Birmingham Stamp Office, it is recommended that you resubmit your notification electronically and include the details of any payments you have made in respect of that notification. If not resubmitted, postal submissions will not be dealt with until the COVID-19 measures end.  

  7. HMRC are not stamping stock transfer forms but instead will issue a letter to the sender (a) confirming receipt of Stamp Duty; (b) detailing the transactions HMRC are confirming receipt for and the reference codes; and (c) giving assurance that HMRC will not pursue a penalty against the Registrar for registering the new ownership of the shares. 

  8. Upon receipt, recipients must send a copy of the letter to the company together with the stock transfer form and share certificate for registration. If you are submitting a Form SH03 to Companies House, a copy of the form and letter should be sent to the Registrar of Companies. 

As these measures are temporary, HMRC will provide further updates on stamping procedures once COVID-19 countermeasures end. 

Our corporate team are on hand to answer any queries or provide any advice in respect of the above if you are unsure on which forms to use (in addition to any other corporate or tax queries). 

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