What Happens to Shares and Investments When Someone Dies?

Shares and investments form part of the estate in the same way as bank accounts and property. As executor, you are responsible for identifying all investments, valuing them as at the date of death, notifying the relevant institutions, and ultimately either transferring the holdings to beneficiaries or selling them and distributing the proceeds. The rules around valuation, ISAs, and capital gains are specific and worth understanding before you begin.

Types of investment you may encounter

Executors commonly find one or more of the following types of investment held by the deceased:

• Shares held directly in a company, either as paper share certificates or through a nominee account with a stockbroker or investment platform
• Stocks and Shares ISAs (Individual Savings Accounts), which hold shares, funds, or bonds in a tax-free wrapper
• Unit trusts and OEICs (Open-Ended Investment Companies), which are pooled investment funds
• Investment trusts, which are companies whose shares are listed on the stock exchange and which invest in other assets
• Insurance bonds (also called investment bonds or life assurance bonds), which are single-premium life insurance policies used as investment wrappers
• NS&I products, including Premium Bonds, Direct Saver, and Income Bonds

Each type has its own process for notification, valuation, and distribution, but the first step is always the same: identify what exists and notify the relevant institution of the death.

Valuing investments for probate: the date-of-death price

For probate purposes, shares and listed investments are valued as at the date of death using the mid-price rule. This is a specific HMRC valuation method for quoted shares:

• Take the closing prices shown in the daily official list for the date of death (the highest price and the lowest price for that day)
• Add them together and divide by two
• This mid-price is the value used for each share in the probate valuation

If the death occurred on a weekend, bank holiday, or other day when the market was closed, you use the lower of the mid-prices available from the business days either side of the date of death.

For unit trusts and OEICs, the valuation is based on the bid price on the date of death. For investment trusts (which are listed shares), the same mid-price rule applies.

Insurance bonds are valued at the surrender value at the date of death. You will need to contact the bond provider directly to obtain this figure.

If the deceased held shares in a private (unlisted) company, the valuation is more complex and you may need a professional valuer.

ISAs: the Additional Permitted Subscription

An ISA in the deceased's sole name loses its ISA tax-free status when the account holder dies. The ISA becomes a standard investment account or cash account and forms part of the estate in the usual way.

However, a surviving spouse or civil partner is entitled to an Additional Permitted Subscription (APS). This allows the survivor to invest an additional amount into their own ISA, equal to the value of the deceased's ISA at the date of death, without it counting towards their annual ISA allowance. The APS effectively preserves the tax-free status of the money even after the original ISA is closed.

The APS must be applied for with the ISA provider within a specified time limit, currently three years from the date of death or 180 days from the estate being administered, whichever is later. The surviving spouse should raise this with the ISA provider as part of the notification process, not wait until the account is about to be closed.

Share certificates: notifying the share registrar

If the deceased held paper share certificates, those shares are registered in their name on the company's share register. To deal with the shares, you will need to contact the share registrar for each company. The three main registrars in the UK are:

To find out which registrar looks after a particular company's shares, check the company's investor relations page or the back of the share certificate itself. Each registrar has a bereavement or estate services team. You will need to provide the death certificate and, if the balance exceeds the registrar's threshold, the Grant of Probate before they will transfer or sell the shares.

Online investment platforms

Many people now hold shares and funds through an online investment platform rather than in paper form. Common platforms include Hargreaves Lansdown, AJ Bell, Interactive Investor, and others. Each platform has its own bereavement process, but the general steps are similar.

When you notify a platform of a death, they will freeze the account so no further transactions can be made. They will also provide a date-of-death valuation statement, which you will need for the probate application. Most platforms will not transfer or sell investments without either the Grant of Probate or (for smaller accounts) a small estate declaration. Always check the current contact details on each platform's website, as these can change.

Transferring versus selling investments

As executor, you have two options for dealing with investments once probate has been obtained: transferring the holdings to beneficiaries in their current form (known as an "in specie" transfer) or selling the holdings and distributing the cash proceeds.

• In specie transfer: The shares or fund units are transferred directly into the beneficiary's own account without being sold. This avoids crystallising any gain or triggering a sale at a potentially unfavourable time. It is often the preferred route where a beneficiary wants to continue holding the investment.
• Selling: The executor instructs the platform or registrar to sell the holdings. The cash proceeds are distributed according to the will or intestacy rules. This is simpler administratively but involves selling at whatever the market price is at the time of sale.

The decision between these approaches should take into account the beneficiaries' wishes, any capital gains considerations (see below), and the practicality of each route given where the investments are held.

Capital gains tax during estate administration

There are two distinct capital gains positions to understand:

• No CGT on gains up to date of death. Any gain that accrued during the deceased's lifetime is not subject to capital gains tax on death. The investments are treated as if they were acquired by the estate at the market value on the date of death (the "uplift" to market value). This means that growth from before the date of death is effectively wiped out for CGT purposes.
• CGT may apply during estate administration. If the executor sells investments during the administration period and those investments have increased in value since the date of death, a gain may arise. The estate has its own CGT annual exempt amount during the administration period. If gains are large, it may be worth taking advice on the best timing and approach for disposals.

When probate is needed before institutions will act

Most investment platforms and share registrars have their own threshold below which they will act on a small estate declaration without requiring the Grant of Probate. Above their threshold, they will not transfer or sell the investments until you present the sealed grant. These thresholds vary by institution and are not always published. Always ask each platform or registrar for their current threshold when you make the initial notification.

Where probate is required, you will need a sealed copy of the Grant of Probate from the Probate Registry. Additional sealed copies cost £16 each and are worth ordering at the time of the application if you know you will need several. Always check the latest official fee on GOV.UK before applying.

Practical steps for executors

1. Identify all investments by reviewing correspondence, bank statements (for dividend payments or platform fees), and the deceased's email inbox.
2. Contact each institution to notify them of the death and have accounts frozen.
3. Request a date-of-death valuation statement from each institution. This will be needed for the probate application and for the estate accounts.
4. Calculate the value of all share certificates using the mid-price rule for quoted shares.
5. For ISA holdings, check whether a surviving spouse is entitled to claim the Additional Permitted Subscription and raise this with the provider promptly.
6. Once probate is obtained, decide (in consultation with beneficiaries) whether to transfer investments in specie or sell them.
7. Keep a record of all sales and any gains made during the administration period in case CGT reporting is required.

For guidance on probate valuations more broadly, see our guide to probate valuation date. For NS&I and Premium Bonds specifically, see NS&I and Premium Bonds after death.