Late fathers SIPP, now worth less?

[bunchofkeys]

Just want to get an idea of what should normally happen with a SIPP when someone passes away.

HL were informed that my father passed away late 2023, they subsequently froze the account and i needed to send documents to release the funds.
Thankfully i was able to capture a screenshot of the value of the SIPP account before it was frozen, not a huge amount just over £9k, but more than what I've been quoted i will receive which is about £2500 (as a the only beneficiary).

What i don't understand is, if the account was frozen back in 2023, whilst the procedure to close the account was started, how is the figure now less than what was captured?
The most time consuming part was waiting for probate.
The SIPP was just holdings in shares, which have subsequently dropped in price since 2023.
So, Is it standard practice to quote the price of a share on today's value, compared to what is was back in 2023, given that the account was frozen?

[Greenmantle]

You need to find out the date for selling the stock.
It could have been any date from when it was frozen.
The administrators of the SIPP would have to have legal notice (the Probate or Death Certificate) before cashing in.
I would presume once they had that then they would have cashed it out.

[alscar]

Usually funds aren’t released to the Executors control until probate is obtained although some Financial institutions seem happier to do this depending on quantum sooner.
Frozen meant the shares would sit there but they would be worth today whatever they are now worth - a quarter or so of the previous value does seem low though.

[Simpo Two]

Interesting, so the frozen bit is the access, not the value of what's in it which varies as normal.

It's a pity an Executor couldn't have sold the shares at the outset, but I guess the system doesn't work like that.

Was the time taken to get Probate reasonable? 'Consequential losses'?

[Panamax]

alscar said:

Frozen meant the shares would sit there but they would be worth today whatever they are now worth

Yes, it's "access" that's frozen on death, not the "value".

In an ISA there are no gains or losses that get counted for Capital Gains Tax purposes. But if executors suffer a loss in a general investment account those losses can be offset against any gains elsewhere within the estate.

[Mr Whippy]

£9000 to £2500 in a year and a bit?

What was your father invested in?

Something doesn’t sound right to me.

[hidetheelephants]

Twitter and FTX shares?

[alscar]

Simpo Two said:

Interesting, so the frozen bit is the access, not the value of what's in it which varies as normal.

It's a pity an Executor couldn't have sold the shares at the outset, but I guess the system doesn't work like that.

Was the time taken to get Probate reasonable? 'Consequential losses'?

Of no help to the OP but depending on the type of Stocks / Funds held and the Financial Institution involved it is possible to transfer Funds from Stock market based to Money market based and then once probate obtained the Money market funds can then be sold.
As Executor I did this as wanted to protect the profits seen from prior investments on the beneficiaries behalf and not " risk " the market reducing.

[Steve H]

I saw a similar situation with an estate that went through probate in 2022 as values dropped on investments. Worth noting that the valuation at death is used for IHT calculations, there is a route for claiming overpaid IHT back but it is time limited.

The question of how the values dropped by so much for the OP during a pretty good year for share prices is well worth looking into though.

[Zigster]

That’s the bit that seems odd to me: dropping from £9k to £2.5k in a year. What on earth was it invested in that lost 75% in a year?

[chrisch77]

Zigster said:

That’s the bit that seems odd to me: dropping from £9k to £2.5k in a year. What on earth was it invested in that lost 75% in a year?

Aston Martin?

[scot_aln]

Zigster said:

That’s the bit that seems odd to me: dropping from £9k to £2.5k in a year. What on earth was it invested in that lost 75% in a year?

Especially in what was a pension product.

[bunchofkeys]

Thank you for the replies, will take this up with HL and see when the shares were sold.
Shares in question were just some AIM companies.

[Chris Type R]

bunchofkeys said:

Thank you for the replies, will take this up with HL and see when the shares were sold.
Shares in question were just some AIM companies.

Not unexpected for AIM.

[alscar]

bunchofkeys said:

Thank you for the replies, will take this up with HL and see when the shares were sold.
Shares in question were just some AIM companies.

I assume that you aren't the Executor of your Dads estate then ?

[Zigster]

AIM companies are a pretty weird investment for a very small SIPP to hold. But, yes, very high risk stocks (with poor liquidity) so that could explain the apparent fall in price.

[Rufus Stone]

If your rather was over age 75 when he died, the SIPP will have to deduct income tax before paying to you. Might account for some of the apparent reduction.