The Lemon Fool

Hi everyone

When my daughter was born she was given some money by various people which I used to buy some shares in Vodafone. The shares were bought in my name. My daughter is 18 now and I'd like the shares to be in her name. I'm not sure of the best way to achieve this, and I would be grateful of any advice. When VOD sold Verizon I opted to sell the Verizon shares and I simply gave her the money from that sales, which amounted to about £600. The current value of the VOD shares is about £860. The simplest way might be for me to sell them, give her the money to buy as many as she can in her own name.

Thanks for any advice offered

Milt

This article explains several opotions avilable to you. http://www.traderstaxclub.co.uk/public/130.cfm

Miltomatic wrote:The current value of the VOD shares is about £860. The simplest way might be for me to sell them, give her the money to buy as many as she can in her own name.

How do you hold the shares? If they are in Certificate form you can simply get them transferred to your Daughter via the Registrar. If you hold the shares Electronically you would probably be best to ask your Broker to change your Holding into Certificate and then approach the Registrar. I use HSBC InvestDirect and the charge £15 to convert a holding into certificate form. £15 is probably worth it........

Miltomatic wrote:When my daughter was born she was given some money by various people which I used to buy some shares in Vodafone. The shares were bought in my name. My daughter is 18 now and I'd like the shares to be in her name. I'm not sure of the best way to achieve this, and I would be grateful of any advice. When VOD sold Verizon I opted to sell the Verizon shares and I simply gave her the money from that sales, which amounted to about £600. The current value of the VOD shares is about £860. The simplest way might be for me to sell them, give her the money to buy as many as she can in her own name.

First, I would suggest asking your daughter about selling. You seem pretty clear that they belong to her, and although you've been entitled to make decisions about them as a trustee, now that she's 18 she ought to be the one who makes the decision. Legally, you might or might not still be entitled to make the decision - I don't know enough about either trust law or the exact nature of the trust (very probably a rather informal one, but the arrangement is legally speaking a trust) under which you've been holding them for her to be able to say. But she should IMHO have a say in the process, because she's going to become entitled to make decisions about whether to sell anyway!

If she decides she wants to sell the shares, then the easiest option is almost certainly for you to sell them on her behalf and hand the proceeds over to her.

If she decides she wants to keep the shares, then it shouldn't be too difficult to transfer them to her without the costs of selling and re-purchasing. How to do that depends on how they're held.

If they're held in a broker account, ask the broker about transferring them to your daughter. Make it clear that they're beneficially owned by her already - you're just transferring the legal ownership. That's because it's relevant to the question of whether stamp duty is payable on the transfer - I think it means that it isn't.

If they're held as a certificate, it's a matter of filling out a stock transfer form and sending it and the certificate to the company's registrars. I think that you can claim exemption from stamp duty on it as a trustee releasing assets from trust to their beneficial owner.

Finally, do keep all paperwork about them deriving from gifts to her and the shares merely held by you on her behalf, then handed back to her now she's no longer a minor, for at least a year or two, just in case the taxman wants to check. I think that's a very low risk, by the way - it's just that having papers you don't end up needing is vastly less awkward than not having papers you do end up needing!

Gengulphus

The advice from Gengulphus is correct. If you hold a share certificate it's just a matter of printing and completing the stock transfer form near the bottom of this list (for some reason I can't link directly to the form) - https://www-uk.computershare.com/invest ... Id=SCUKVOD - and sending it to Computershare with the share certificate. They will then issue a new certificate in your daughter's name.

If the shares are held in an account you fill in a similar form but the shares are then transferred into a new account in your daughter's name - http://www-uk.computershare.com/Content ... &theme=cpu

That's because it's relevant to the question of whether stamp duty is payable on the transfer - I think it means that it isn't.

Don't worry about stamp duty - it's not payable on gifts.

Hey, thank you all very much. The shares are help electronically, so a transfer seems the best bet.

You've all been a great help.

Milt

Clitheroekid wrote:

That's because it's relevant to the question of whether stamp duty is payable on the transfer - I think it means that it isn't.

Don't worry about stamp duty - it's not payable on gifts.

But if I read this situation correctly, it's not a gift - it's a release of shares held in trust into the hands of the beneficiary. Probably a bare trust, I think, but my knowledge of trust law isn't great, so I could be wrong about that - and by the way, for the same reason I may well not be using the right technical language about it!

I don't think stamp duty is payable on such releases from trust either - but I'm not all that certain: the few times I've filled in such forms are all over ten years ago and only involved gifts and dematerialisation of share certificates without changes of either legal or beneficial ownership. I remember a long list of reasons for exemptions - indeed, the fact that a gift inter vivos was reason L in that list has stuck in my memory for some reason - and think they included such situations where legal ownership but not beneficial ownership changes, but the full list hasn't stuck similarly!

As regards 'worrying' about stamp duty, if I'm right about that, there's no need to worry about paying it - but the stock transfer form does require something to be said about it to avoid it being payable. Having now looked at the stock transfer form you linked to, it seems to now be covered by a general exemption on transfers under £1k that aren't part of a series of linked transactions (which is clearly just a proviso to tackle the obvious avoidance technique that such a general exemption would otherwise produce). But I'd need to look at the precise wording of the form in more detail to be certain of that!

Gengulphus