Generally, transfers of marketable securities (i.e. shares in Maltese companies) are subject to stamp duty at a rate of 2% of the 'real value' (as determined under the Duty on Documents and Transfers Act). This rate further increases to 5% for companies that meet specific property holding thresholds.
For yet another year, the concession on the reduction in stamp duty from 5% to 1.5% when family businesses are transferred inter vivos to younger generations has been extended and thus continues to provide support to family businesses who wish to benefit from this reduction as an advantageous pre-step in their succession planning.
This reduction applies to donations of shares from parents to their children, or in the absence of children, to the children of their siblings.
These benefits shall only be granted in respect of a transfer by gratuitous title (i.e. donation) where the notice required under the Duty on Documents and Transfers Act and the Duty on Documents and Transfers Rules has been submitted to the Commissioner for Revenue, using the form or other means provided by the Commissioner, on or before 31 December 2025.
Moreover, this donation process serves as an excellent opportunity for families to review and, if need be, update the company's documents to ensure that these are aligned to accommodate the transition to the new generation. It is also prudent to assess whether the governance structures of the company remain effective and suitable for the needs of the incoming leadership.
