What Happens to Shares When Someone Dies UK
Updated 15 May 2026 · 8 min read · England & Wales
Shares and other listed investments are among the most common assets in UK estates, yet many executors are unsure what to do with them. This guide covers how shares are valued for inheritance tax, how they pass to beneficiaries, what happens to ISA wrappers, and which reliefs may reduce the IHT bill.
Step 1 — Identify the Holdings
Start by gathering share certificates, broker statements, and CREST (electronic) holding confirmations. Shares can be held in several ways:
- Certificated: Physical share certificates. Registered with the company's registrar (Link Group, Equiniti, Computershare).
- CREST: Electronic holdings held in the CREST settlement system, usually through a nominee account with a stockbroker or platform.
- ISA: Shares held inside a stocks and shares ISA. The ISA wrapper affects tax treatment.
- Pension self-invested fund (SIPP): Shares inside a pension are not part of the estate for IHT and are dealt with separately via the pension provider.
Contact every broker and registrar the deceased used. The Death Notification Service (deathnotificationservice.co.uk) can notify multiple financial institutions simultaneously.
Step 2 — Valuing Shares for IHT
Quoted shares (listed on the London Stock Exchange, AIM, or a recognised overseas exchange) are valued on the date of death using the quarter-up rule:
For example, if the closing prices on the date of death were 200p and 208p, the probate value is 200 + ¼ × (208 − 200) = 202p per share. You can also use the mid-price from a recognised source if it is lower — HMRC allows whichever produces a lower valuation (beneficial to the estate).
If the date of death falls on a weekend or bank holiday, use the prices from the last working day before death or the first working day after — whichever gives the lower value. Report quoted shares on HMRC form IHT412 (stocks and shares listed on a recognised exchange) as part of the IHT400.
| Share type | Valuation method | HMRC form |
|---|---|---|
| Quoted (LSE Main Market) | Quarter-up rule | IHT412 |
| AIM-listed | Quarter-up rule (check BPR status) | IHT412 / IHT413 |
| Unquoted / private company | Professional valuation (HMRC SAV) | IHT413 |
| Unit trusts / OEICs | Bid price on date of death | IHT411 |
| Investment trusts (LSE-listed) | Quarter-up rule | IHT412 |
Step 3 — Obtaining Probate
Executors generally need a grant of probate before a registrar or broker will transfer or sell shares. Once the grant is obtained, provide a sealed copy to each registrar or broker alongside a completed transmission form. The registrar will then update the register to show the executor as the new registered holder — this is called transmission and does not require a stock transfer form (J30).
Small holdings exception: Most registrars operate an indemnity or small estate procedure for holdings below a threshold (often £25,000). The executor signs an indemnity instead of producing probate. Contact each registrar to check their limit.
For shares held in a nominee/broker account, probate procedures vary by platform. Most platforms will freeze the account on notification of death and release funds or transfer holdings once probate is produced.
Step 4 — Sell or Transfer to Beneficiaries
The executor can either sell the shares and distribute cash, or transfer shares in specie to beneficiaries using a stock transfer form (J30). Considerations:
- Selling during administration: Any gain above the probate value is subject to CGT within the estate. The estate has a CGT annual exempt amount of £3,000 (2026/27). The executor's rate is 18% (basic rate) or 24% (higher rate) on residential property; 18% flat on all other assets from April 2024.
- Transferring in specie: No CGT on the transfer itself. The beneficiary takes the shares at probate value as their base cost. Future gains on disposal are calculated from that base.
- Assent: For shares specifically bequeathed in a will, the executor completes an assent (alongside the J30) to confirm the entitlement.
ISA Shares on Death
A stocks and shares ISA loses its tax-free status when the holder dies. The ISA becomes part of the estate and is valued for IHT. However, a surviving spouse or civil partner can claim an Additional Permitted Subscription (APS):
- The APS equals the value of the deceased's ISA at the date of death
- It can be paid into the survivor's own ISA (not necessarily with the same provider)
- Must be claimed within three years of death, or 180 days after administration completes
- The APS is in addition to the survivor's own annual ISA allowance
Note: the APS is an additional subscription allowance, not an automatic rollover. The surviving spouse must actively claim it with their ISA provider.
AIM Shares and Business Property Relief
Many AIM-listed shares qualify for Business Property Relief (BPR) at 100%, removing them from the IHT charge entirely. The conditions are:
- The deceased must have held the shares for at least two years before death
- The company must be a trading company (not an investment company)
- BPR can be denied for excepted assets (cash, investments not needed for the business)
From April 2026, the 100% BPR and Agricultural Property Relief combined allowance is capped at £1 million per person (announced in the October 2024 Budget). Holdings above £1 million attract a 20% effective IHT rate (50% of the 40% rate). Seek specialist advice for large AIM portfolios. Report BPR claims on form IHT413.
Jointly held shares — if shares were held as beneficial joint tenants, they pass automatically to the surviving co-owner by right of survivorship. The executor has no role in their transfer. A survivorship notification (not probate) is sent to the registrar with a death certificate.
Notifying the Registrar
For certificated shares, write to the relevant registrar with:
- A certified copy of the death certificate
- A sealed copy of the grant of probate (or letters of administration)
- The original share certificates
- A completed transmission application form (available from the registrar's website)
The three main UK registrars are Link Group, Equiniti, and Computershare. Each has its own forms and procedures, but all require broadly the same documents.
Frequently Asked Questions
How are shares valued for inheritance tax purposes?
Quoted shares are valued using the 'quarter-up' rule: take the lower of the two quoted prices on the day of death, add a quarter of the difference between the lower and higher price. HMRC requires this for IHT400 (form IHT412 for quoted stocks). Unquoted shares need a professional valuation agreed with HMRC Shares and Assets Valuation.
Can shares bypass probate?
Shares held jointly as beneficial joint tenants pass automatically to the surviving owner by survivorship — no probate needed. Small share holdings (typically under £25,000, though each registrar sets its own limit) can sometimes be transferred using a simplified 'small estates' procedure without a full grant of probate.
What is the difference between stock transfer and transmission?
A stock transfer form (J30) transfers shares between living holders. Transmission is the process by which shares pass to an executor or administrator on death — it does not require a stock transfer form. Once the grant is obtained, the executor lodges a transmission form with the registrar and can then transfer shares to beneficiaries using a J30.
What happens to ISA shares when you die?
An ISA loses its tax-free wrapper on the death of the holder. However, the surviving spouse or civil partner can claim an Additional Permitted Subscription (APS) equal to the value of the ISA at death, allowing them to re-shelter the same amount in their own ISA. The APS must be used within three years of death (or 180 days after estate administration completes, if later).
Do AIM shares qualify for inheritance tax relief?
Many AIM-listed companies qualify for Business Property Relief (BPR) at 100%, meaning their value is exempt from IHT provided the deceased held them for at least two years before death. Not all AIM shares qualify — you must check each holding individually, and HMRC can challenge valuations. The relief survives the October 2024 Budget changes but is now capped at £1 million from April 2026.
What if the shares have gone up in value since the date of death?
The beneficiary inherits shares at their probate value (date-of-death value). Any gain from probate value to the eventual sale price is a capital gain in the hands of the beneficiary. However, if the executor sells shares during administration, the gain is assessed against the estate. Losses can offset gains within the estate, and CGT uplift at death means shares are re-based to date-of-death value.
Include Your Investments in Your Will
Shares, ISAs, and investment accounts should be clearly addressed in your will to avoid uncertainty for your executor. Our DIY will kit guides you through including all your assets — without the solicitor fees.
Get the WillSafe Kit →Related Articles
- Valuing an estate for probate
- How to apply for probate
- Inheritance tax thresholds 2026
- Business Property Relief explained
- CGT on inherited property
- ISA and inheritance tax
- Assets that don't need probate
This article is for general information only and does not constitute legal or tax advice. Share valuations and BPR eligibility should be confirmed with a qualified adviser. Tax rules are those applicable in England and Wales as at May 2026.