This paper presents a Contactless Slipring System (CSS) based on rotating magnetic field theory for transferring electrical power to a rotatable shaft. Besides the analytical expressions, a 3-D FEM (Finite Element Model) is developed for simulation study, and a practical circuit is built for system verification and performance evaluation. A method of canceling the rotational torque associated with the rotating magnetic field is proposed and practically verified by testing the prototype system. It has been shown that the proposed system can transfer power up to about 950W to the load at the secondary circuit with a practically achievable quality factor Qs of 5. The FEM simulation and practical results show that unlike the conventional rotating transformer solution, the added magnetic shield increases the power transfer capability by 20%. The uncompensated power receivable at the secondary is 157 VA and 198 VA for the cases without and with aluminum shield respectively.