Inherited Company Share Valuation: A Guide for Executors
When you inherit company shares, calculating their value often seems as easy as searching the internet for stock market data. However, not all companies are listed on stock exchanges. In such cases, you must contact Shares and Assets Valuation (SAV) to provide a valuation for HMRC. Understanding inherited company share valuation is a crucial step in estate administration.
Share Valuation for Listed Companies
Generally, valuing shares in listed companies is straightforward. You typically obtain their market value from stock exchange data. However, there are instances where you may need a specific share valuation for listed companies, even if they are publicly traded. For example, if the quotations are cancelled or suspended, or if the holding exceeds £10,000,000. These situations require more detailed assessment for inherited company share valuation.
If the shares have a stock exchange listing, you can simply ask your broker for a probate valuation. They may charge a fee for this service. You can typically deduct this fee from the overall valuation amount. This process is usually very straightforward. If you prefer not to pay that fee, you can often perform the valuation yourself using historical market data.
Valuing Unlisted Shares: A Specialized Company Share Valuation
When shares are not listed on a stock exchange, the process for inherited company share valuation becomes significantly more complex. In such cases, you will need to ask the company accountant for detailed financial information. Subsequently, you must typically submit these details to Shares and Assets Valuation (SAV), a part of HMRC, to formally agree on the valuation. This process often involves expert appraisal and can take considerable time. For detailed guidance on estate valuations for tax, refer to HMRC’s guidance on valuing assets for Inheritance Tax.
Key Principles of Inherited Share Valuation
The value of inherited shares is determined by the closing price on the date of the deceased’s death. This means the share price will vary from that time until you own them and can trade them. There is no way to “freeze” the value. If the death occurs on a day when the market was closed, you can choose between the closing price of the first day before or the first day after the death. Furthermore, if a dividend was due at the moment of death, its value is included in the share valuation. These principles apply to both listed and unlisted shares. For more on managing estates, our Probate Guide offers comprehensive information.
Modern Tools and When to Seek Professional Expertise
Originally, inherited company share valuation might have been very complex. Heirs needed to find physical property documents and manually calculate individual values. However, most people now hold their shares with online brokers. In those cases, it is easy to see a full list of shares owned. Online interfaces even provide default valuations with the last closing price if the market is closed.
If no complex interests are involved, calculating share value should not be difficult. Therefore, you can often do it yourself. However, if you find it too time-consuming, or simply prefer not to invest time in this task, you can ask for professional help. Experts can streamline the company share valuation process. Consider visiting our Probate Services page for assistance. For broader insights into stock market operations, a resource like the London Stock Exchange can provide context.
