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Shares

Publicly quoted companies (plc's)

Check for shares held in quoted companies. There may be share certificates or more likely dividend payments will be visible on the bank statements of the deceased. However, this may not be so easy to spot if dividends are reinvested into new shares. If the deceased used the services of a stockbroker then their statements will be useful, but very often shares acquired via State sell-offs will not have been bought via the broker. The Registrars of the listed company will need to be informed of the death of the shareholder and will need to see a copy of the death certificate. The easiest way to find the name of the registrars is to go onto the shareholder/invetsor section of the company's website. It is normally easy to contact the registrars by telephone and they generally have an option to notify the death of  shareholder. Once the death has been notified most registrars will stop payments of dividends, which are then released once probate has been granted and formally notitified to them. Any dividend payments already in progress that are made payable to the deceased will normally be accepted into a bank account if it was previously an account of the deceased.

Jointly held shares will pass to the survivor and the share registrar will simply change the ownership.

Valuing shares

There are several companies who will value shares for you but in our opinion they can be relatively expensive. These services are, of course, an allowable expense.

Shares are relatively easy to value using the internet. Most PLCs have current and historic share prices on the investor section of their websites. Values can be also be obtained at: Yahoo Finance or Google Finance. They each provide the same data but we prefer Google because by entering "LON:" in the search field before typing a company name, the interactive results are limited to UK companies, making them easier to find.

If the total estate value is below £250,000 the valuation of the shares will not affect Inheritance Tax because none may be due. In this case you can just take the closing price on the date of death and multiply it by the number of shares to get a good approximate value of the holding. If the value of the estate is higher than this then you must be more accurate and it is best to follow the "quarter up" method.

Quarter up valuation

Using the "High" and "Low" quotes for the day the deceased died, work out one-quarter of the difference between the two figures and add it to the "Low" figure. The equation is: Low+(High-Low)/4. e.g. If High = 120 and Low = 115 the the valuation figure is 115+(120-115)/4, which is 115+5/4 which equals 116.25.

Death when the Stock Exchange was closed

If the deceased died on a weekend or bank holiday then the Personal Representative can choose either the last day the Stock Exchange worked before the death or the first one after. You are perfectly free to choose the day which gives the lowest valuation if you wish to reduce Inheritance Tax liability but you have to be consistent. You cannot, for instance, choose Friday for some shares and Monday for others.

Ex-dividend values

When a dividend on a share is announced then the owner of that share owns the dividend and will receive it when it is due, even if he sells the shares or dies. If a shareholder dies after a dividend is announced but before it is paid then the dividend must be valued as part of the estate at the time of death. In newspapers shares are marked "XD" when this applies and if using newspapers to value shares the XD value needs to be added to the price. Google and Yahoo, however, show the XD value already included.

This means that if you use Google or Yahoo and you receive a cheque for a dividend payable before the death you will not add the amount to the value of the estate because it will already be included. The documentation with the dividend cheque will always show the dividend date.

Private or unquoted shares

Private companies do not have registrars in the same way as quoted companies. You should write to the company informing them of the death of the deceased at the registered office address which can be found on dividend vouchers or at: Companies House.

Obtaining a value of unlisted or private company shares for probate purposes is not as simple as for quoted companies, as the shares are not openly traded. The value of the holding for probate purposes will also depend upon the percentage held, and often considerable discounts on a minority holding (a holding of less than 50% of the total shares in issue) are acceptable for probate purposes. If a recent valuation has not been carried out and the estate of the deceased is likely to attract Inheritance Tax you may need to use the services of an accountant to provide a valuation. Find a local accountant here: ICAEW.

It is worth checking first with the company in case a recent valuation for another shareholder has been obtained. Holdings of shares in private companies will not necessarily attract Inheritance Tax but will nevertheless need to be returned on the probate forms. If certain conditions are met the shares may attract 100% Business Property Relief

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