Selling Shares during Probate
11 July 2018
If someone owned shares at the time that they died, then these will be included as part of their estate and they will need to be sold or transferred as part of the estate administration. We explain the different ways in which shares can be owned and what to do if the share certificates are missing.
Dealing with shares during probate can be complicated, particularly if you're not used to the technical terminology that's commonly used in these transactions. It becomes even more complicated if you're missing the paperwork that's needed to sell or transfer the shares.
How Can Shares be Held?
Shares can be held in one of two ways; they can either be held with a paper share certificate or be held in what's called 'corporate nominee'. If shares are held in corporate nominee then this means that they are held electronically and, as such, no share certificate is needed.
To find out how the shares are held, you can check with the share registrar. This is an institution that holds records of share ownership. There are multiple share registrars, so to find out which one you need to contact, just check any of the share paperwork that you can find - this will have the registrar's name on. The largest share registrars in the UK are Link Asset Services (Formerly Capita) and Equiniti, so it's quite likely that the shares would be registered with one of these. Once you have identified the correct registrar, contact them to ask them to confirm how the shares are held.
Selling Shares Held in Corporate Nominee
If the shares are held in corporate nominee then no share certificate will be needed to sell them, which makes the sale of the shares relatively straightforward.
In order to sell shares held in corporate nominee a Share Sale Form will need to be completed. Each share registrar has their own version of this form, details of which can usually be found on their website. Once you have completed this form, send it off with the grant of probate included.
Once the shares have been sold you'll receive a contract note in the post confirming the sale. The proceeds from the sale will then be paid into the estate a little while later (either by cheque or BACS transfer). This usually takes around 2-4 weeks once the sale paperwork has been sent off.
Selling Shares with a Share Certificate
If you have the share certificate and this is valid, then again the sale of the shares is relatively straightforward. You simply need to complete the Share Sale Form, as above, and send this off with the share certificate and the Grant of Probate.
It's important to note that registrars tend to issue new certificates when shares are consolidated, rendering the original certificates invalid. This means that some older share certificates may no longer be valid, which puts you in the same position as you would be if the certificate was lost all together.
If you're unsure of whether the share certificate you hold is valid, the share registrar will be able to send you a list detailing which share certificates are still valid. Check the certificate number against this list to confirm.
Selling Shares without a Share Certificate
If the share certificate is missing or if it's invalid, then this makes the process of selling the shares a little more complicated. You will need to request indemnity from the share registrar before the shares can be sold, which can involve more paperwork and additional fees.
It's important to note that requesting indemnity can delay the Probate process significantly, so be prepared for these potential delays.
Indemnity can be requested in one of the following ways:
Register the share certificate as missing
You can contact the share registrar to inform them that the share certificate is missing and they will ask you to pay an indemnity fee. This fee will usually be based on the value of the shares held (so for larger shareholdings the fee will be higher). On average the fee is usually around £50-£70 but this can be much higher if the shares hold a high value.
Once they have registered the share certificate as missing, the share registrar will send through a new share certificate and the necessary paperwork for you to sell or transfer the shares. It's important to note that if the new certificate also gets lost then you'll need to start the whole process over and also pay the fee again.
Tick the option on the Share Sale Form to say the certificate is missing
The Share Sale Form (that you have downloaded from the registrar's website) might have an option to tick to say that the share certificate is missing. Link Asset Services and Equiniti both now offer this option for the sale of shares, to make their bereavement services easier. Note that this can only be used if you intend to sell the shares, this cannot be done for the transfer of shares.
Link Asset Services and Equiniti both charge a nominal fee for selling shares with a missing certificate. These fees are detailed on their Share Sale Forms and they will be deducted from the sale proceeds before these are paid to the Estate. Be aware that they may also charge a small administration fee on top of this.
Additional Points to be Aware of
Under new European share dealing regulations, you'll need to include a National Client Identifier on the share sale paperwork, so you'll need to work out what this is.
The National Client Identifier (NCI) is a number that will relate to the deceased as the owner of the shares, not to you as Executor. In order to establish the National Client Identifier, you'll need to know the nationality of the deceased and (if British) their National Insurance Number. You can then use a table to identify which NCI relates to the deceased. The share registrar should be able to provide this for you.
In some circumstances, shares aren't sellable directly through the registrar. This may be the case if the registrar doesn't have an in-house share dealing service. In this instance you'll need to instruct a stock broker to complete the transaction for you. If there are multiple shareholdings with many different companies then it could be a good idea to instruct a stock broker anyway as it will make the process far easier for you. Bear in mind that the stock broker will charge a commission for their service.
Co-op Legal Services Can Take Care of the Shares for You
As you can see, dealing with shares during Probate can be complicated. If any paperwork is missing then this can delay the Probate process and complicate things further. With our Probate Complete Service, our Probate specialists can take care of the sale or transfer of any shares that the deceased owned. We will liaise with the share registrar on your behalf, obtain values of the shares and include this in the Inheritance Tax calculation.
Co-op Legal Services is the largest provider of Probate and Estate Administration services in England and Wales, and trusted to deal with over £1.3 billion in Estates annually.