Share Transfers happens in any businesses, your Company Secretary or Agent will prepare a Contract Notes. The Contract Notes are required to be executed and stamped within a timeframe.
What’s within the Contract Note for a share transfer?
According to the Stamp Duty Ordinance (Cap. 17), the contract note should contain the following particulars
(a) whether the person effecting the sale or purchase of the stock is acting as principal or agent and, if as agent, the name of the principal must be listed;
(b) the date of the transaction and the making of the contract note;
(c) the quantity and description of such stock;
(d) the price per unit of such stock and the amount of the consideration or, in the case of an exchange, particulars of the property for which such stock is exchanged; and
(e) the date of settlement.
How much should you pay for the stamp?
The calculation of the stamp amount is according to the share transfer price. The equation of stamp duty paid:
Profit / Number of Shares x Number of Shares Transfer X 0.26 stamp + HKD5 admin fee to IRD
What kind of documents you need to prepare?
To enable the Stamp Office to assess the proper amount of stamp duty payable, the following documents and information should be submitted together with the transfer documents:
a. the Articles of Association and the latest copy of Annual Return (Form NAR1)
b. the latest copy of Return of Allotment (Form NSC1) ; if applied.
c. a certified true copy of the Agreement for Sale and Purchase of the shares
d. a statement on whether the company and its subsidiary(ies) (if any) has acquired any landed property, rights to acquire landed property or investments and, if so, with a completed Schedule of Landed Properties
e. the following documents if the company involved has commenced business: –
- the latest audited accounts of the company and its subsidiary(ies)
- certified management accounts to-date of the company and its subsidiary(ies)
- a certified copy of the resolution of meetings of directors for dividends paid or payable,
- any other information and documents, where necessary, in individual case.
f. For the a recently incorporated company should prepare a written confirmation supported by a copy of the certificate of incorporation of the company
Time for Stamping
Stamp duty payable should within the following specified time:
|Nature of Document||Time for Stamping|
|Contract Note for Sale or purchase of any Stock||2 days after the sale or purchase, if effected in Hong Kong; 30 days after the sale or purchase, if effected elsewhere|
|Transfer operating as a voluntary disposition inter vivos||7 days after execution; 30 days after execution if executed outside Hong Kong|
|Transfer of any other kind||Before execution; 30 days after execution if executed outside Hong Kong|
Late stamping subjects to the payment of penalty
|not exceeding 1 month||2 times the amount of stamp duty|
|exceeding 1 month but not exceeding 2 months||4 times the amount of stamp duty|
|in any other case||10 times the amount of stamp duty|
If you are requesting for remission of the penalty, then you should submit a full written explanation of the delay with supporting evidence. Then, the collector may or may not remit wholly or in part the penalty payable depending on individual circumstances.
For further information, please contact us.
You may want to read: CALCULATE STAMP DUTY RATES FOR COMPANY SHARE TRANSFER