Establishing an accurate value can be more complicated than simply looking up the current share price, particularly when an estate contains multiple holdings, historic investments or securities traded outside the UK.

A professional probate valuation provides a clear assessment of the securities held at the date of death. This can help executors, administrators and professional advisers prepare the information required for probate and Inheritance Tax reporting.

What is a probate share valuation?

A probate share valuation establishes the value of shares and other securities owned by the deceased at the date of death.

For shares listed on the London Stock Exchange, HMRC guidance generally requires the closing value on the date of death and uses a calculation known as the “quarter-up” price. If the stock exchange was closed on that date, such as at a weekend or on a bank holiday, prices from an appropriate adjacent trading day may be used in accordance with HMRC guidance.

The valuation may also need to account for factors beyond the headline share price, including:

• Dividends due to the estate
• Accrued interest
• Rights issues or capitalisation issues
• Different classes of shares
• Foreign-listed securities
• Historic corporate actions
• Holdings in ISAs or investment portfolios

A professional valuation brings this information together into a clear report.

Greater accuracy at the date of death

Share prices can change significantly from one day to the next. Using a current value, an approximate figure or a price taken from the wrong trading date could result in an inaccurate estate value.

A professional probate valuation uses the relevant date-of-death information and applies the appropriate valuation method to each holding. This gives executors and advisers a more reliable basis for calculating the overall value of the estate.

Support for Inheritance Tax reporting

The value of an estate is used to determine whether Inheritance Tax may be payable and what information needs to be reported to HM Revenue & Customs.

Where the deceased owned listed shares or securities, details may need to be included as part of the estate’s Inheritance Tax account. A properly prepared valuation can support this process by providing consistent figures and clearly identifying how the value of each holding was calculated.

This does not replace legal or tax advice, but it can give the executor, solicitor or accountant the valuation information needed to complete the relevant estate documentation.

Identification of details that may otherwise be missed

Securities valuations are not always straightforward. A holding may have changed its name, merged with another company, undergone a share consolidation or been affected by another corporate action.

There may also be dividends or interest connected with a holding that need to be considered separately. These details can be difficult to identify from an old share certificate or investment statement alone.

Specialist historic pricing data and securities research can help establish what was held and how it should be valued at the relevant date.

A clearer record for executors and beneficiaries

Executors are responsible for identifying and valuing the assets within an estate. Keeping a clear record of the information used can help demonstrate how the reported figures were reached.

A written probate valuation provides a useful audit trail for executors, professional advisers and beneficiaries. It can also make it easier to answer subsequent questions about the securities included in the estate.

Reduced administrative burden

Researching several different shareholdings can take considerable time, particularly when information is incomplete or the investments are unfamiliar.

Using a specialist valuation service can reduce the amount of research required from the executor or adviser. Instead of locating historic prices and interpreting individual market markings, they receive the relevant valuations in a single, structured report.

This can help keep the estate administration process moving and allow the professionals involved to concentrate on the other aspects of the estate.

Useful information for later decisions

A probate valuation establishes the value of the securities at the date of death. That figure may remain important after probate has been granted, particularly if the shares are later transferred to beneficiaries or sold during the administration of the estate.

Maintaining an accurate date-of-death record can help advisers and beneficiaries understand the original probate value and consider any subsequent movement in value. Separate tax advice should be obtained where necessary.

What information is needed?

To prepare a probate share valuation, it is helpful to provide:

• The full name of the deceased
• The date of death
• The company or investment name
• The number and class of shares held
• Share certificates, portfolio statements or other available records
• Details of any jointly owned holdings
• Information about foreign or unlisted securities

Do not worry if some records are incomplete. The available documents can be reviewed to determine whether further information or research may be required.

How Stockval can help

Stockval has specialised in securities valuations and historic share price research since 1988. We provide valuations for solicitors, accountants, banks, brokers, professional firms and private individuals.

Our service can cover UK and international securities, historic pricing research, dividends and accrued interest, and the valuation calculations required for probate purposes.

If you require a probate valuation or would like to discuss the securities held within an estate, contact Stockval to find out how we can assist.