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Selling shares as part of an estate
Posted: 14 March 2018 14:41:54(UTC)

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A friend of mine - well, to be strictly accurate, my bridge partner - is helping a relative wind up the estate of her recently deceased husband, who left everything to her. They have some shares (mainstream stuff) to sell. They have paper certificates and don't appear to have a stockbroker involved.
- I assume that they can register the shares online with Capita or which ever company acts as registrar, but that can be quite a lot of work: would a more hassle-free alternative be to go to a local stockbroker (in Bristol) and get them to make the sale?
- they have probate but I am not sure if selling is as straight forward as presenting the probate and death certificate stuff or if there's more too it than that?
- are they liable for capital gains?

Any info welcome
Tony Peterson
Posted: 14 March 2018 15:05:32(UTC)

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All she has to do is to transfer the shares into her own name. Stock transfer forms cover the eventuality for bereaved spouses.. She just sends the certs and the tranfer form duly filled in to the registrar of each company. Costs nothing. Transfer forms can be downloaded or printed off. The registrars will probably oblige if she hasn't a printer. A phone call to each might help.

Neither CGT nor IHT are going to be due until the widow dies.

Going to a broker raises hefty and unnecessary costs.

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dyfed on 14/03/2018(UTC), Guest on 16/03/2018(UTC)
Posted: 14 March 2018 16:03:51(UTC)

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The original question was "to sell" in which case it isn't necessary to transfer the shares into the wife's name first. If she has probate and is the executor and beneficiary, she can arrange for them to be sold. Some registrars offer a share dealing service and, although I'm not a fan of banks' share service, her own bank should be able to arrange a sale.

Capital Gains Tax may be due on any increase between the Probate Value (value at date of death) and realisation value when sold.
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dyfed on 14/03/2018(UTC), Guest on 16/03/2018(UTC)
Tony Peterson
Posted: 14 March 2018 16:23:50(UTC)

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I stand corrected - but if the value is over £44000 disposing of the lot would give rise to CGT complications, in that the amount would have to be declared, and CGT paid on any increase in value since probate if that exceeds £11300.

Simply transferring the ownership to the widow would allow the benefit of the income from the shares to continue, and the shares could be sold as and when cash is required.

The registrars themselves often have dealing offers. A talk to them first could be money saving.

I have in fact bought shares directly from bereaved beneficiaries who wanted to cash them in. Just the fidget of getting the transfer forms stamped by HMRC for amounts over one thousand Saves a lot of commission and avoids the spread.

March is the month my ' dark puddle' usually meets to fine tune our disposal of certificates within the declarable and taxable CGT limits. Seems that everyone is hanging on this year.


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Careful Man on 17/03/2018(UTC)
Mr J
Posted: 14 March 2018 19:25:31(UTC)

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Yes it is easy to re-register through the registrar into her name, can then choose to transfer to an electronic holding with someone like Hargreaves Lansdown. Any sale can then be timed to suit e.g. to spread capital gains over tax years.

I think the sooner the better from the point of dealing with any further dividends. Once registered in her name dividend Cheques will also be issued in her name. I needed to ask for dividend Cheques to be reissued in the beneficiaries name and the registrar tried to charge a 3 figure fee which exceeded the value of the Cheques. Got the fee waved by making a formal complaint to the registrars but was all unnecessary hassle.
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dyfed on 14/03/2018(UTC)
Frank Wright
Posted: 14 March 2018 21:01:07(UTC)

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It's straightforward to get the shares transferred into the name of the spouse. All the registrars will have forms available for the purpose and there ought not to be a fee. Certainly don't need anyone to do this for you, such as solicitor, stock broker, etc. The form will want names, addresses, date of death, etc. and you will be asked for certificates, and certified copy of probate (confirmation in Scotland).

As someone said, CGT would be measured from the valuation at the date of death, but if the shares are simply transferred, then there is no CGT liability until whenever the shares are sold, which can be done in tranches to ensure the limit in a given tax year isn't breached.

And can confirm there is no IHT liability in passing between spouses.

Just check that the registrar does the transfer correctly and doesn't issue the shares in the names of the executors by error.

There's plenty of help on the internet, a search on the follow brought up some useful information:

transfer of shares upon death of shareholder

The National Grid website has a useful bereavement guide.

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dyfed on 14/03/2018(UTC), Tony Peterson on 14/03/2018(UTC)
Tony Peterson
Posted: 14 March 2018 22:11:51(UTC)

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If your friend needs to sell some of her spousally inherited shares, why don't you sell up a few fundholdings and buy some from her?

Apart from SIPPs and ISAs, certificated mainstream shares are more than worth their weight in gold. Nominee holdings can be a problem if your brokers turn out to be dodgy.

Trading certificates with friends is the most efficient way to acquire stakeholdings.
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dyfed on 15/03/2018(UTC)
Posted: 15 March 2018 08:14:21(UTC)

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Thanks Tony, didn't think of that, interesting do I do it? Can check on line but if u know that would b great. Do I just get the forms from the registrar and send all the paperwork up in one step? We look to be talking about amounts under £10k per holding.
Tony Peterson
Posted: 15 March 2018 08:57:23(UTC)

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If you've got a printer there are many sites which will provide "Share Transfer Forms" online, and you just print them off and fill them in (many come with instructions attached).

(How this must have wonderfully disrupted the solicitors' body's income - I used to have to pay £1 per form from Oyez in Chancery Lane)..( For 1 printed sheet!!!)

HMRC (online) provides instructions for stamping the form (they'll calculate the amount you owe for purchases over £1000.) Under 1K you do not need to involve HMRC. Nor if the shares are a gift.

Send the transfer form with the cheque to them, a couple of days later the form comes back stamped (they are not always terribly efficient - I got my stamped form back with someone else's as well once). Then send the certificate and transfer form to the registrar. Within a couple of weeks you get your certificate. Having bought, HOLD.

Make sure she doesn't sell more than 40K worth before 6 April if she doesn't want to have to fill in CGT pages for HMRC.

A cash-strapped friend that had inherited a pile of certificated holdings was very happy to sell me and one of my friends some of her newly acquired shares (she was executor so could sign the transfer form) - we agreed to pay the Friday closing price one weekend. She did not get such a good bargain from the broker for the balance.

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dyfed on 15/03/2018(UTC), Mickey on 15/03/2018(UTC), AJW on 15/03/2018(UTC)
Posted: 15 March 2018 09:36:28(UTC)

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The full amount of the annual exemption is allowed to personal representatives for the:

period from the date of death to the following 5 April (no matter how short this period is)
2 tax years following the year of death

Where gains arise in a later year, no annual exemption is due.

The above from HMRC's website.

Tony P - you mention £44,000 but I think you meant £45,200 in disposals for current tax year.

I do not think this reporting limit applies to Estates however.
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Tony Peterson on 15/03/2018(UTC), dyfed on 15/03/2018(UTC)
Tony Peterson
Posted: 15 March 2018 09:50:38(UTC)

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Thanks for pointing that out, Kwikkers.

Four times the exempt amount. I should have known better.
Posted: 15 March 2018 14:46:28(UTC)

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Some fantastic replies here, well done to all contributors.
Alan Selwood
Posted: 18 March 2018 00:45:56(UTC)

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Computershare gave this information:

"Once the death has been formally registered, we will be able to transfer the shares. Please complete the relevant Transfer form which is available via Downloadable forms and send to the appropriate office for processing. You can locate the correct postal address by selecting the Company name that your request relates to from our client list".

You will need to send a probate copy if not already done.

You should find on the back of the transfer form various headings relating to 'reason for the transfer'. Look for the one relating to inheritance and mark the relevant letter on the form for the reason for transfer. Using that letter ensures that the transfer is exempt from fees.

I would certainly suggest just printing off the transfer form from the registrar's website for each shareholding, and doing the transfer to the widow asap.

Then at her leisure she can sell any shares she needs to, probably via the registrar at nil or low cost, or if wanting to keep any, transfer them in free to an online platform and preferably have the value of them put into an ISA (up to £20,000 worth in each tax year).
Posted: 18 March 2018 14:14:31(UTC)

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Thanks guys.
The lady just wants shot of the shares, doesn't want any hassle, so is going into her local bank (happens to be Barclays) to see what they would charge her to do one trouble-free transaction. If they want to change an arm and a leg we'll go to plan b!
Appreciate everyone's contribution.
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