Gifting Shares in a Family Business – How We Helped Complete a Share Transfer

We assisted a company in completing a share gift transaction that involved transferring ownership of company shares from father to son. This type of transfer is a key step in family business succession planning and can have important tax and legal implications.

The transfer was influenced by the new Business Property Relief and Inheritance Tax changes due to take effect from 6 April 2026. We worked closely with the client and liaised with other relevant parties to ensure the matter was completed quickly, correctly, and in full compliance with company law.

Why Gifting Shares in a Company Requires Careful Planning

Transferring shares, particularly as a gift between family members, is not as straightforward as simply handing over the legal interest. A number of issues must be considered, including:

• Independent legal advice: To protect the interests of both parties and ensure the transaction cannot be challenged later, each family member should have their own legal adviser.
• Tax efficiency: Timing share transfers before legislative changes can make a substantial difference to future tax liabilities.
• Company law compliance: Steps such as updating statutory registers, board approvals, and Companies House filings are essential to validate the transfer.
• Accurate documentation: Share transfers (in this scenario) require specific documents, including a deed of gift, a stock transfer form, and updated share certificates.

The Share Transfer Process We Managed

In this case, the father wished to gift his entire shareholding to his son. 

To ensure everything was carried out smoothly, we managed the process end-to-end, including:

• Producing board minutes for the company, approving the transfer and recording directors’ decisions in line with their Companies Act duties.
• Producing the stock transfer form, recording the formal transfer details and ensuring they were properly executed.
• Producing the new share certificate to be issued in the son’s name to evidence his ownership of the shares.
• Organising for the parties to seek their own independent legal advice on the Deed of Gift (which was initially prepared by the father’s solicitor, formally recording the gratuitous transfer).
• Overseeing the preparation of Companies House forms (PSC01 and PSC07) to update the public record.

Outcome for the Client

The share transfer was completed successfully, with the son becoming the sole registered shareholder in the company. The family achieved its succession goals, the company records were fully updated, and the transaction was protected from any adverse impact of the tax changes, so long as the ‘7 year rule’ from the date of the gift is applicable and the father survives seven years so that the gift becomes what is termed a ‘Potentially Exempt Transfer’ that becomes fully exempt from Inheritance Tax. 

Expert Advice on Gifting Shares and Succession Planning

This case highlights how essential it is to have experienced advisers when dealing with company share transfers and family business succession planning. From tax considerations to company law compliance, every stage needs to be carefully managed.

If you are considering gifting shares or planning for the future of your business, get in touch with our team today to discuss how our corporate and tax solicitors can help.

Disclaimer: The case studies on this website are provided for illustrative purposes only and do not constitute legal advice. All identifying details have been removed or altered to protect client confidentiality. Outcomes described are specific to the circumstances of each case and may not be indicative of future results. You should seek independent legal advice before taking any action based on the information provided.

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