Purchase of property - Share Transfer
Updated 28 May 2019
What is Share Transfer?
1. Usually applies to blocks of flats and larger properties containing several units.
2. The property is owned by a holding company. Purchasers acquire a block of shares in the holding company which entitles them to rights but limited by rules contained in the Articles of Association of the holding company. There is no requirement to pass a contract before the Royal Court. Completion is usually effected by the execution of a Share Vending Agreement, the issue of a new share certificate and an entry in the Register of Members of the holding company.
3. Once a shareholder, the client becomes responsible for a certain percentage of all communal outgoings.
4. Purchasers of share transfer property are able to take out a mortgage as the lender will take a charge over the shares under the Security Interests [Jersey] Law 1983.
5. Entitled/ Licenced/ Entitled to Work or Registered persons can purchase shares. The sale of shares is not generally governed by housing law, but any occupier must possess Entitled or Licenced Status .
6. It is recommended that clients use a lawyer to check the Share Vending Agreement, investigate the company and any restrictive clauses of the company. It is also important to establish that the company does not have any pre-existing liabilities. There are reduced legal fees for first time buyers.
7. Share certificates and Registers are not public documents.
8. The States approved the Taxation (Land Transactions) (Jersey) Law in June 2008 which came in to force, on the 1st January 2010. See www.gov.je/TaxesMoney/LandTransaction/Pages/FactSheet.aspx The tax payable on a share transfer purchase is exactly equal to that which would have been payable under the Stamp Duties and Fees (Jersey) Law 1998 for freehold transactions. See 11.1.50
9. A property purchased by share transfer is classed as movableestate and must therefore be included in a Will of Personalty.