Deed Of Gift Of Shares Template for England and Wales

A Deed of Gift of Shares is a formal legal document that enables you to transfer ownership of company shares to another party without receiving payment in return. Under England and Wales law, this document creates a binding legal obligation and serves as conclusive evidence of your intention to make a gratuitous transfer of your shareholding.

When do you need this document?

You need a Deed of Gift of Shares when transferring shares as part of family succession planning, particularly when passing business interests to children or relatives. This document is commonly used in tax planning strategies to take advantage of annual gift allowances or to reduce inheritance tax liabilities. Corporate restructuring scenarios also require this deed when reorganising shareholdings between related companies or transferring shares to employee benefit trusts. Additionally, you may need this document when making charitable donations of shares or when settling family disputes involving business interests.

Key legal considerations

The deed must clearly identify the donor's legal ownership and unrestricted right to transfer the shares being gifted. You need to include comprehensive warranties confirming that the shares are free from encumbrances, charges, or third-party claims. The document should specify whether the transfer includes any accrued dividends and outline any restrictions on the recipient's ability to further transfer the shares. Consider the company's articles of association, which may contain pre-emption rights or transfer restrictions that could affect the validity of the gift. Tax implications are crucial, including potential capital gains tax liabilities for the donor and inheritance tax consequences if the donor dies within seven years of making the gift.

Legal requirements in England and Wales

Under the Companies Act 2006, share transfers must be properly documented and registered with the company to be legally effective. The deed must be executed as a deed under the Law of Property (Miscellaneous Provisions) Act 1989, requiring signatures from all parties in the presence of witnesses. You must complete the appropriate stock transfer form in accordance with the Stock Transfer Act 1963 and submit this alongside the deed to the company for registration. The Financial Services and Markets Act 2000 may impose additional requirements if the company is regulated or publicly listed. Stamp duty considerations apply under current stamp duty legislation, though gifts between individuals are typically exempt. Ensure compliance with the company's constitution and any shareholder agreements that may restrict transfers or require board approval for new shareholders.