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A reader asks: Hi, I am executor of a Will. I need to sell off some shares to split between the beneficiaries. Therefore, I do not need a dealing account. What’s the best way to do this?
As you say you don’t need to open a share dealing 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?
Selling certified shares that form part of an estate
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.
Selling shares held in nominee accounts for a beneficiary
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 fee 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.
Giving shares to charity after someone has died
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.
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