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Original poster

Shares in childs name...

18 replies

Chooks · 03/08/2010 15:09

Wondering if anyone can give me advice on this?

My 4yo has 5% share in a company. Someone wants to buy these shares. We want out and away from it. Can I, as his legal guardian, sell them on his behalf?

Thanks in advance for any help with this.

OP posts:
mumblechum · 03/08/2010 17:11

How did that happen? A child can't hold shares in their own name.

Are the shares in a trust fund? If so, who are the trustees?

Original poster
Chooks · 03/08/2010 19:36

Thank you for replying... no they are not in a trust fund. Shares are in his name and his name only.

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Original poster
Chooks · 04/08/2010 07:48

5% was given to him by his Dad. Do you think they're not legal anyway and so can't be sold?

Would really appreciate any help on this...

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Original poster
Chooks · 04/08/2010 10:54

Anybody? [hopeful]

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Original poster
Chooks · 04/08/2010 19:00

Anybody about tonight that can help? Struggling to find any info anywhere and can't afford to involve a solicitor.

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Original poster
Chooks · 04/08/2010 21:01

Ah, c'mon good people of MN! Must be someone that knows [desperate]

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ChasingSquirrels · 04/08/2010 21:03

I don't see what a child can't own shares (see here for example).

I don't see why you wouldn't be able to sell them on his behalf, bit don't know about this.

Original poster
Chooks · 04/08/2010 21:06

We're in the process of selling them, but they've put the brakes on, saying that it might not be a legal transaction. They've already paid quite a substantial (to us) amount of money as deposit and we can't pay it back if they pull out. Am really worried...

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ChasingSquirrels · 04/08/2010 21:08

is there a solicitor involved in the sale? Can you ask them?

Original poster
Chooks · 04/08/2010 21:39

No... it's all a bit complicated really. We can't afford the fees for a solicitor. The money is coming to us, but my DC's Dad is dealing with it, then transferring the money to us once sold. He's not involved with the company anymore. He got a third of the overall agreed price given in cash to secure the sale, but now the person that's buying them is questioning if it's all legal.

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jamiesolivers · 04/08/2010 22:17

A child can own shares. Think childs parent or guardian could sell on childs behalf. btw I am a solicitor but don't specialise in this area. You really should get proper legal advice - could you pay the fees from the money you will get for the shares?

Original poster
Chooks · 04/08/2010 22:20

Thank you for replying jamiesolivers! Would a solicitor do that do you think?

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BeenBeta · 04/08/2010 22:45

There should be some sort of share transfer document or trust deed in place.

That document is where you start from. The shares may stil in practice belong to the father of your DC if that formal legal transfer never took place.

There are all sorts of complex anti avoidance rules for income tax and capital gains tax purposes as well.

You need a solicitor.

Original poster
Chooks · 04/08/2010 22:49

I know I've seen what looked a bit like a certificate with my DC's name on and details of the company and what % he had... would that be the document?

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BeenBeta · 04/08/2010 22:54

Yes that is it.

If it was a private company there should be some sort of record created by the Company Secretary on the company share register.

Children can own shares as jamiesolivers says. It is fairly common for parents to transfer shares in a private company to their children as part of their estate planning but the HMRC always look closely at it.

Original poster
Chooks · 04/08/2010 22:58

Thank you for helping BeenBeta! So, can I sell them on his behalf? His dad has mentioned that my DC will possibly have to 'sign' to make it legal?

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BeenBeta · 05/08/2010 08:49

It depends how the shares are held. If they are helf in trust the trustees have to sign. I know a child can sign but I really feel a bit uncomfortable saying yes or no in this case as I just dont know the facts.

I think if it is a substantial sum a good trust and estates solicitor who is a member of STEP is who you need to talk to. The website has a search page that allows you to find your nearest one. We use Boodle Hatfield as we have a complex estate with our children owning shares via several trusts.

The STEP solicitor will also help you fill in the tax return forms you will need to complete for the child. It really is an exceedingly complex area. I am not a solicitor.

Original poster
Chooks · 05/08/2010 09:13

Oh gosh, alot more complicated than I thought then. It's made even more difficult for us becuase of the 'middle man'. I was told, we sign the paper, he hands over £7000. We've had £3000 already, and the agreement was that we would get the rest in monthly installments of £1000 and once the last amount was paid we'd sign them over. Thank you for your advice, and the link, I will take al look.

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