The Executor’s will often need to convert assets into cash to achieve this.
It is not uncommon for estates to include a number of small shareholdings in various quoted companies. Often these shares will have been acquired a long time ago, for example when the various Utility companies were first floated on the stock markets, or perhaps when free shares are issued, such as for customer rewards or historically when some building societies became banks (e.g. Halifax).
Where a small number of shares in a quoted company are held, it may not always be cost effective to sell these if they have little value.
Quoted companies often use a separate administrative company to maintain the register of shares (called a registrar), such as Equiniti or Computershare. These companies are responsible for managing the shareholdings and usually any changes to shareholdings (for example a transfer or a sale) must be made via the registrar.
There are various options available to the Executors to deal with such small shareholdings:
The easiest way to dispose of the shares quickly can be to sell them through the registrar. However there are usually minimum dealing fees, and if the value of the shareholding is less than this they will not process the transaction.
It may be possible to transfer the shares directly to a beneficiary of the Estate, although this may be impractical where there are several beneficiaries.
Some registrars do not charge a fee for transferring shares, provided the shares are certificated (i.e. you either have the original share certificate or the shares had been electronically registered to you). There are fees where share certificates have been lost.
The Executors should consider the possibility that the value of the shares may change in the future and therefore they could hold extra value which may be forthcoming to the beneficiaries. Commercial factors like potential takeovers or rights issues should also be taken into account when deciding whether to sell or transfer.
Another option is to gift the shares to charity.
ShareGift is a charity set up to deal with small unwanted shareholdings. They collect these small donated shareholdings and sell in larger amounts, giving the proceeds to a wide range of UK charities.
More information about the charity is available on their website.
Registrars such as Equiniti and Computershare work directly with the charity and so if the value of the shares are below the minimum fee, you can contact the relevant registrar and ask for details to gift the shareholding to charity.
Gifts to charity are exempt from Inheritance Tax and so the value of the shares would not be included in the chargeable value of the Estate.
You can find more information on our Probate Services page.