Do I need probate for shares?
It depends on who holds them and how much they are worth. Certificated shares go through the company's registrar, which has a small-estates limit; platform holdings follow the platform's limit, much like a bank's.
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The short answer
- Certificated shares in a single company are dealt with by that company's registrar (Equiniti, Computershare or MUFG Corporate Markets). Each runs a small-estates procedure for holdings below its limit, commonly in the region of £20,000 to £30,000 per company, with a form, an indemnity and a fee. Above it, the grant is required.
- Shares held on a platform (Hargreaves Lansdown, AJ Bell, Interactive Investor and the like) are one account, tested against the platform's own limit, which is often similar to a bank's.
- Shares cannot be sold before the grant if the holding is above the limit. They can be valued, and dividends paid after death belong to the estate.
- Value at the date of death using the quoted price, on the "quarter-up" basis for larger estates.
- Each company holding is assessed separately, so a portfolio of small certificated holdings may need no grant while one large holding does.
Certificated shares and the registrars
Shares held in the person's own name, with paper certificates, are recorded on the company's register, kept by a registrar. There are three main ones in the UK: Equiniti, Computershare and MUFG Corporate Markets (formerly Link). Each has a bereavement team and each runs a small estates procedure: for holdings in a given company below the registrar's limit, they will register the transfer or sale to the entitled person on the death certificate, a small estates form, an indemnity (sometimes counter-signed by a bank or insurer) and a fee, without a grant. The limits are set by the registrar, apply per company, and are typically in the £20,000 to £30,000 range; check the current figure with the registrar concerned.
Above the limit, the registrar needs to see the grant before it will register any transfer or sale. Because the limits are lower than a bank's, a single holding of a well-known share bought decades ago (the privatisation and demutualisation shares are the classic case) can be what makes a grant necessary.
The registrar can also tell you what is held, and whether there are unclaimed dividends. Old dividend cheques and uncashed payments are a common find.
Shares on a platform
Most shares bought in the last twenty years are held through a nominee: the platform's nominee company is the registered holder, and the investor's ownership is recorded in the platform's own books. For probate purposes this behaves like a bank account. The platform has a limit; below it, the account is closed and the proceeds paid to the estate on the death certificate; above it, the grant is required. The account is frozen from notification, though existing standing instructions are usually stopped and dividends continue to accrue.
A platform account may contain an ISA, a general investment account and a SIPP side by side. The ISA and the general account count towards the limit; the SIPP is a pension and is paid outside the estate at the provider's discretion. See ISAs and pensions.
Valuing the shares
Every holding must be valued at the date of death for the estate and, where relevant, for inheritance tax. For quoted shares HMRC uses the "quarter-up" method: take the lower of the two closing prices for the day, and add a quarter of the difference between them. Where death falls on a weekend the lower of the two adjacent trading days' valuations is used. Registrars and platforms will provide a date-of-death valuation on request, usually for a fee, and there are online tools that do it from the ticker and date.
The probate value becomes the base cost for capital gains tax. Shares sold by the estate at a loss within twelve months of death can be used to claim inheritance tax relief; shares sold at a gain may create a CGT liability for the estate.
What to do
- Find every holding. Certificates, dividend vouchers, tax returns, and the annual statements from any platform. The registrars' tracing services and the Unclaimed Assets Register cover forgotten holdings.
- Notify each registrar and platform with the death certificate and ask for a date-of-death valuation and their bereavement requirements.
- Check each holding against the relevant limit. If all are below, use the small estates procedures and the platform's closure process. If any is above, a grant is needed and it covers everything.
- Do not sell before you have authority. Beneficiaries sometimes want shares sold quickly in a falling market; without a grant (or a holding below the limit) nobody can instruct the sale.
Common questions
Can shares be sold without probate?
Only where the holding is below the registrar's or platform's limit and their small-estates procedure is used. Above the limit, no sale or transfer can be registered until the grant is produced. The shares can be valued and dividends accrue to the estate in the meantime.
What is the registrar's small estates limit for shares?
Each registrar sets its own, per company holding, and changes it from time to time. Limits are commonly in the region of £20,000 to £30,000. Equiniti, Computershare and MUFG Corporate Markets each publish their bereavement requirements and will confirm the current figure by phone.
How are shares valued for probate?
At the date of death, using the quoted price. HMRC's quarter-up method takes the lower closing price plus a quarter of the difference to the higher. Registrars and platforms provide date-of-death valuations, usually for a fee. The probate value is then the base cost for any later capital gains tax.
Do shares held with Hargreaves Lansdown or AJ Bell need probate?
The platform applies its own limit to the account. Below it, the account is closed and paid to the estate on the death certificate and its bereavement form; above it, the grant is required. A SIPP on the same platform is a pension and is paid outside the estate regardless.
What happens to dividends paid after death?
They belong to the estate. Dividends declared before death but paid after are also estate income. The registrar or platform will hold them until it has dealt with the account, or pay them to the estate's account once it has the necessary authority.
Do shares in a private company need probate?
The company's articles of association govern the transfer of shares on death, and the directors usually require the grant before registering a transfer or transmission to the personal representatives. Private company shares also need a professional valuation for the estate, and may qualify for business relief from inheritance tax.
Related guides
Important
Solace is not a firm of solicitors and does not provide legal, tax or financial advice. We are an estate administration service and we are not regulated by the Solicitors Regulation Authority, the Financial Conduct Authority or any equivalent body. Nothing in this guide constitutes legal, tax or financial advice, and no solicitor–client relationship is created by reading it.
This article is general information only. It reflects the position in England and Wales at the date shown above; the law and the figures change, and Scotland and Northern Ireland differ in important respects. It may not apply to your circumstances. Whether a particular estate needs a grant is ultimately decided by the organisations holding the assets, and their limits change. Administering an estate carries personal legal responsibility, and you should obtain advice from a qualified solicitor, accountant or other regulated professional where appropriate. Always check current rates, fees and deadlines against GOV.UK before acting.