Selling shares in more than one name
Discussion
Just a basic question. Fred and Julia have a share holding in both their names. Fred dies, what procedure would Juia have to follow should she wish to sell the shares? I'm assuming she would have to send a copy of Freds death certificate to the registrars and get the shares rgistered in just her name?
Am I roughly correct, and if so what sort of timescale , roughly, would the process take?
Am I roughly correct, and if so what sort of timescale , roughly, would the process take?
Europa1 said:
Presumably she is entitled to the shares under Fred's will?
I'm under the impression, that like bank accounts , the money/shares automatically become the property of the surviving account/share holder. As example, regarding my Mother, as I am on the deed for her house (herself and me) and likewise regarding her bank accounts, I shall not need probate as the property/accounts automatically become mine on her demise. Thats what I'm lead to beleive, assume its the same with share holdings, if anyone can clarify? Several misconceptions there.
Nothing is automatic. My understanding in the situation you have described is....
If there is a will then there will be executors in place and they must obtain probate before they can do anything with the deceased's assets as provided for in the will.
If there is no will, someone will need to be the legal administrators and they will need to get probate before the deceased's assets can be distributed as per a prescribed formula.
Inheritance tax will need to be calculated and paid before probate is granted. This means a lot of work to get all the deceased's affairs collated, into good order, valued, etc before applying for probate.
R
Nothing is automatic. My understanding in the situation you have described is....
If there is a will then there will be executors in place and they must obtain probate before they can do anything with the deceased's assets as provided for in the will.
If there is no will, someone will need to be the legal administrators and they will need to get probate before the deceased's assets can be distributed as per a prescribed formula.
Inheritance tax will need to be calculated and paid before probate is granted. This means a lot of work to get all the deceased's affairs collated, into good order, valued, etc before applying for probate.
R
Now thats confused me. It was a solicitor that told me about the dual name bank accounts , the money becoming automatically the property of the surviving account holder. Assumed it would be the same regarding shareholdings. need to do some digging, and get some professional advice.
To explain, what I am trying to do, is make financial provision for my kids in regards of funeral fees in the event of my demise. I know you can get all sorts of bonds , plans, etc etc. All they do though, is invest in the stock market, potentially a nice little earner , for the provider. My idea was to invest in a share portfolio in my name and one of my kids as shareholders. Preferably company(ies) which operate a drip/scrip share scheme , so the portfolio will rise in value, over the long term. Thats the idea at least, obviously, ts important that the shares and thus the monies could be quickly available for family to pay the funeral providers without the stress and buggaring about waiting for probate. Thats the aim, anyhow
To explain, what I am trying to do, is make financial provision for my kids in regards of funeral fees in the event of my demise. I know you can get all sorts of bonds , plans, etc etc. All they do though, is invest in the stock market, potentially a nice little earner , for the provider. My idea was to invest in a share portfolio in my name and one of my kids as shareholders. Preferably company(ies) which operate a drip/scrip share scheme , so the portfolio will rise in value, over the long term. Thats the idea at least, obviously, ts important that the shares and thus the monies could be quickly available for family to pay the funeral providers without the stress and buggaring about waiting for probate. Thats the aim, anyhow
My understanding is that as far as husband/wife are concerned (and who are legally married), any gifts between them are entirely free of any tax at the time of the gift and on the subsequent death of either of them. On the death of the surviving spouse inheritance tax will be due.
Any other gifts to a person who is not a spouse, including gifts by joint shareholding (ie the gift of the deceased's share) is liable to inheritance tax, although prior gifts in aggregate totalling £3000 or less in any one tax year can be excluded, and any other gifted amounts over £3000 in aggregate, 7 years after they were gifted.
I am prepared to be corrected!
R.
Any other gifts to a person who is not a spouse, including gifts by joint shareholding (ie the gift of the deceased's share) is liable to inheritance tax, although prior gifts in aggregate totalling £3000 or less in any one tax year can be excluded, and any other gifted amounts over £3000 in aggregate, 7 years after they were gifted.
I am prepared to be corrected!
R.
There are two different issues here,
1. Practical access to the money, and
2. IHT liability (if any).
Irrespective of anything else, as Leaper has said any value passing after death other then between spouses will be relevant for IHT. Whether something passes automatically (e.g. joint bank account) or passes in response to specific action (e.g. anything in sole name of deceased) makes no difference. The value that moves must go into the IHT calculations.
Separately, with a joint bank account any funds in the account remain fully available to the survivor after the death of the other. The survivor can just carry on writing cheques etc exactly as before. Once the bank is informed of the death they will rename the account into the sole name of the survivor and it continues as the same account.
With a house in undivided joint names (as opposed to tenancy in common) the survivor will have to sort things out at the Land Registry before being able to sell it on their own. i.e. get the property registered under their sole name. In other words, the change is automatic upon death but at the practical level some paperwork/action is needed to unblock the process. [This is different from an executors' sale.]
Stocks and shares are more like the house than the bank account. The survivor can't just carry on alone until the asset has formally been registered into their sole name.
1. Practical access to the money, and
2. IHT liability (if any).
Irrespective of anything else, as Leaper has said any value passing after death other then between spouses will be relevant for IHT. Whether something passes automatically (e.g. joint bank account) or passes in response to specific action (e.g. anything in sole name of deceased) makes no difference. The value that moves must go into the IHT calculations.
Separately, with a joint bank account any funds in the account remain fully available to the survivor after the death of the other. The survivor can just carry on writing cheques etc exactly as before. Once the bank is informed of the death they will rename the account into the sole name of the survivor and it continues as the same account.
With a house in undivided joint names (as opposed to tenancy in common) the survivor will have to sort things out at the Land Registry before being able to sell it on their own. i.e. get the property registered under their sole name. In other words, the change is automatic upon death but at the practical level some paperwork/action is needed to unblock the process. [This is different from an executors' sale.]
Stocks and shares are more like the house than the bank account. The survivor can't just carry on alone until the asset has formally been registered into their sole name.
- Regarding bank accounts and practicalities you will sometimes find a situation where Mr A has a bank account in his sole name but Mr B has authority to operate the account as well, for instance under a power of attorney. This sort of account is "frozen" by the bank as soon as the bank is informed of Mr A's death. However, if Mr B will need to tidy up Mr A's affairs he has the practical option of removing cash from the account either before the death of Mr A or between the death of Mr A and the bank being informed of the death. Obviously this is not a "correct" course of action but it can be useful in the real world, allowing Mr B a supply of ready cash to help deal with Mr A's affairs. This may become increasingly relevant with probate fees set to increase dramatically.
- Note that banks will usually agree to pay funeral costs out of a deceased's account BEFORE probate is granted, but that's the only immediate expense they will accept. This only helps if there's enough cash in the deceased's account...
Blimey , this is getting more and more confusing. After some tinkering with search strings, I at last got some search results concerning what I was looking for. This article here, basically backs up what the solicitor told me a while ago, concerning bank accounts in dual names:
http://www.mondaq.com/uk/x/470622/wills+intestacy+...
drawing atention to: "the account balance passes in its entirety, by the 'principle of survivorship', to the surviving account holder. The principle of survivorship will override any terms that may be to the contrary in the deceased's Will"
As regards shares, it appears the same principle applies.
https://www.shareview.co.uk/4/Info/Portfolio/defau...
Scroll down to page 4, second column from left. As laid out , this is about ready and quick access to monies in a shares format to cover immediate costs, mainly funeral.
http://www.mondaq.com/uk/x/470622/wills+intestacy+...
drawing atention to: "the account balance passes in its entirety, by the 'principle of survivorship', to the surviving account holder. The principle of survivorship will override any terms that may be to the contrary in the deceased's Will"
As regards shares, it appears the same principle applies.
https://www.shareview.co.uk/4/Info/Portfolio/defau...
Scroll down to page 4, second column from left. As laid out , this is about ready and quick access to monies in a shares format to cover immediate costs, mainly funeral.
I agree with all you say regarding the article. Essentially, for joint accounts the whole account transfers to the survivor irrespective of the deceased's will and the survivor has access to and can use the funds as they wish.
However, the deceased's share of the joint account is liable for IHT so that share must be calculated and included as an asset of the deceased for IHT calculation purposes, and this will need to be done before the executors or personal representatives apply for probate (but see next para). IHT is paid before probate is granted.
There's no doubt that the calculation of the deceased share of the joint account can be complicated. However, if the joint account is held between husband and wife there is no problem: the value of the joint account will pass to the surviving husband or wife (as the case may be) and will not count as part of the deceased's assets at the time of death for IHT purposes, so will be IHT free. The complications arise when the joint account is held with someone other than a husband or wife.
R.
However, the deceased's share of the joint account is liable for IHT so that share must be calculated and included as an asset of the deceased for IHT calculation purposes, and this will need to be done before the executors or personal representatives apply for probate (but see next para). IHT is paid before probate is granted.
There's no doubt that the calculation of the deceased share of the joint account can be complicated. However, if the joint account is held between husband and wife there is no problem: the value of the joint account will pass to the surviving husband or wife (as the case may be) and will not count as part of the deceased's assets at the time of death for IHT purposes, so will be IHT free. The complications arise when the joint account is held with someone other than a husband or wife.
R.
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