Lost stamped stock transfer forms – a cost effective solution
September 15, 2014
On a disposal the one thing a Seller can’t negotiate around is title to the shares being sold. It sometimes emerges during due diligence that the Target’s Register of Members is not properly written up and the original stamped stock transfer forms evidencing the title of the Seller have been lost.
Section 17 of the Stamp Act 1891 makes it is a criminal offence to enter any person as a member in the Register unless there exists a properly stamped instrument of transfer. A copy is not sufficient. One solution is to have the transfer forms re-executed and restamped with ad valorem duty if the transferor is prepared to cooperate. However, HMRC offer a “free stamping” procedure and will, if their requirements are met, free stamp photocopies of the stock transfer form where stamped originals have been lost or destroyed. In order to take advantage of the “free stamping” service you will need:
- A certified copy of the original stamped stock transfer forms (evidencing that duty has been paid).
- A certified copy of the unstamped transfers.
- A statutory declaration by an officer of the Target setting out the circumstances in which the original stamped transfers were lost or destroyed.
- An undertaking to return the originals to HMRC if they are found.
It is always worth checking with HMRC before applying for “free stamping” to check their precise requirements in your particular case.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.