What is a share transfer charge against shares?

What is a share transfer charge against shares?

If your new home is being purchased by way of share transfer and you are borrowing from a bank, then the Bank will take a charge against shares to secure its loan by way of a security interest agreement. They will take this charge against shares, either by requiring that the share certificate is deposited with the Bank or the shares are transferred into the Bank’s name.


Once you sign your offer letter from the Bank (sometimes called the facility letter) the Bank will instruct its lawyer to draft the legal documentation. To avoid any hold ups with the purchase completion date, it is important to ensure that you return your signed offer letter back to the Bank as soon as possible.

As soon as we receive the Bank’s security documents we will endeavour to send the documents to you as soon as possible, to give you time to read over prior to our meeting. We will, of course, answer any questions you may have when we meet.

It should also be noted that in addition to the documentation that you will be required to sign, Parslows Jersey will also be required to provide a certificate of title to the Bank.

In essence, this document will declare to the Bank that the shares you are buying are suitable for a charge against shares to be registered.

This certificate will require us to confirm that the title to the property is satisfactory, that the relevant consents from the various States’ departments are in force (e.g. Housing consents), that the various search letter replies are satisfactory and to confirm the good standing of the company and title to the shares.

We are obligated to disclose any material adverse factors affecting the property, the company and the shares.

Payment of Jersey Land Transaction Tax

Please note that a loan with a charge against shares will attract a land transaction tax (LTT). This is in addition to the duty or tax that you will pay to purchase your property. You may qualify for reduced stamp duty if you are a first-time buyer.

You will need to provide us with cleared funds for LTT (if any) prior to completion.

Payment of proceeds of loan

Your loan will normally be made available immediately.

Please remember that your loan will not be provided gross. The bank and its lawyer will in most circumstances deduct their fees and charges prior to transfer (unless you have arranged otherwise).

Funds which arrive in our account too late on the day in question to forward them on will be dealt with the next day. We cannot influence the speed of the banking system. In some circumstances this may involve you in having to account for a day’s interest.

Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer. Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered. Information on our website does not constitute legal advice and Parslows Jersey accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website. Please consult a lawyer at Parslows Jersey in the event that you require professional assurance that our information, and your interpretation of the same, is correct.

For further advice please contact Parslows on 01534 630530 or click here.