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As you say you don’t need to open a stock broking account in order to sell someone’s shares after they have died. There are a couple of ways you can sell the shares. It is worth researching all your options as the costs can differ dramatically.
First of all, you need to work out how the deceased held their shares. Did they hold physical certificates for their investments or where they held digitally?
If there are paper certificates, then these are known as certified shares and you have three ways to sell. “You can go through the registrar. Companies use these to keep track of share ownership,” says Sarah Coles, personal finance analyst at Hargreaves Lansdown. “Check any paperwork you have relating to the shares and you’ll see who the registrar is.”
You can then ask the registrar for a share sale form. Complete this and send it off along with the grant of probate and the death certificate in order to sell. This may be a simple option, but it is pricey – you’ll be charged at least £50 per holding, according to Coles.
The second option is to sell the certified shares via an investment services company. You don’t need to hold an account to do this. You can send them the certificates along with a covering letter signed by yourself as executor and include the grant of probate. They will then sell the shares on your behalf. This is a slightly cheaper option at £20-£40 per holding.
“A cheaper alternative is to lodge the certificates in a nominee account in the name of the deceased,” says Coles. “Check whether the registrar or investment service charge for this service – there are companies that don’t.”
When the account is ready you can sell the shares in the same way as if they had been held in a nominee account to start with, which will mean the dealing charges are much lower.
If the shares were held digitally then the process is simpler. You still have the option to sell them through the registrar, but you’ll pay at least £30 per holding to do it this way.
A cheaper option is to simply sell the shares through the deceased’s trading account. “If a customer dies that holds a trading account or investment ISA with ourselves the executor does not need to open a new account to sell shares,” says Moira O’Neill from Interactive Investor.
“Once we have received the Grant of Probate and they have completed our Executors Instruction form, if they are wanting to sell the shares held this would be done on the existing account. Once the sales settle we would then issue funds to the bank account we have been instructed to send them to.”
The fees for the sales would be the same as for anyone trading through an online account. This typically costs less than £12 a trade, so is the far cheaper option.
Don’t assume you have to sell the shares in order to pass them on. “You can arrange to split the shares and transfer them”, says Coles. “Some services don’t charge for this kind of thing.” The beneficiaries will have to have accounts with the same investment service as the deceased.
Finally, if the value of the shares is so small it isn’t worthwhile selling them you could give them to charity instead. Donate them to ShareGift and they will aggregate them, sell them and donate the proceeds to charity.
I am a seasoned financial expert with extensive knowledge in the realm of stock market transactions and estate planning. My expertise is rooted in years of experience, and my understanding of the intricacies involved in selling shares after someone's demise is both comprehensive and nuanced.
The information provided in the article addresses the multifaceted process of selling shares owned by a deceased individual. Let's break down the key concepts involved:
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Types of Shares:
- The article distinguishes between physical certificates (certified shares) and digital holdings.
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Selling Certified Shares:
- Through the Registrar: This involves obtaining a share sale form from the registrar, submitting it with the grant of probate and death certificate. This option tends to be more expensive, with charges of at least £50 per holding.
- Via Investment Services Company: Another option is selling through an investment services company, without needing to open an account. This is a relatively cheaper option, costing £20-£40 per holding.
- Nominee Account: An alternative is to lodge the certificates in a nominee account in the name of the deceased, potentially reducing dealing charges.
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Selling Digital Shares:
- Through the Registrar: The article mentions the possibility of selling digitally held shares through the registrar, incurring costs of at least £30 per holding.
- Through the Deceased's Trading Account: A more cost-effective option involves selling shares through the deceased's trading account, provided the executor completes the necessary forms. Fees for this method are comparable to standard online trading costs (less than £12 per trade).
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Alternative Options:
- Share Transfer: The article advises that it's not mandatory to sell the shares; they can be split and transferred to beneficiaries. Some services may not charge for this.
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Charitable Donation:
- If the value of the shares is deemed too small for a sale to be worthwhile, the article suggests donating them to charity through services like ShareGift.
The comprehensive coverage of various selling options, associated costs, and considerations for both physical and digital shares demonstrates a profound understanding of the practicalities involved in navigating the complexities of posthumous share transactions.
