3.5% War Stock

Mikeyorks

As Executor of a Will - I need to transfer some 3.5% War Stock into someone else's name.

Looks relatively straightforward once I have Probate. But I think I need to offer the option of selling and giving them the proceeds - if that's their choice. Unfortunately I don't have a clue as to how to value them.

The face value is £1200. The 'clean' price at close yesterday is £73.62 ...... but what unit does that apply to? Is it per £100 .... or what?

Any definitive most welcome. Did do a Search ..... but War Stock doesn't appear to surface very often!

baby_boomer

Not a great one to hold if you think that inflation is here to stay.

I would think you are correct to assume that the price is per £100 unit.

That makes some sense compared with a current 5% yield on 10 year government gilts, although that puts the War Bonds yield at under 5% and I'd expect it to be a bit higher given that you can only ever redeem these in the open market.

LongTermLurker

Quicky on google - http://www.taxationweb.co.uk/forum/discuss.php?id=3117

The quote given is per £100 nominal of stock. Therefore if you are valuing, say, £1,000 nominal of stock the value is £720. (old example - LTL)

So I make your holding as being £883.44

LongTermLurker

Sell it on Ebay - http://cgi.ebay.co.uk/4-per-Cent-WAR-STOCK-1929-1942-Receipt_W0QQitemZ170159478143QQcmdZViewItem?hash=item170159478143&_trksid=p3911.m14.l1318

Mikeyorks

baby_boomer wrote: »

Not a great one to hold if you think that inflation is here to stay.

My thoughts - hence the potential offer of selling for the beneficiary.

LongTermLurker wrote:

So I make your holding as being £883.44

Thanks .... I found that link just after I posted this. Bit strange as I had looked several months ago, knowing I would have this job to do, and it didn't show then (and it's 4 years old). But I think I'll pass on the Ebay sale!

But thanks both - makes me confident now as to the value I'm dealing with.

purch

Friday's closing bid was 72.65

......making the running yield 4.80 % slightly better than the very long dated Gilts (25 years plus)

HanSpan

My neighbour is executor of a will for another neighbour and has just discovered that the deceased must have had some of these 3.5% War Stocks as he was paid a divident of £5.25 in June. The only paperwork she has found is a letter from 1982 about transferring the stock from his Mother on her death, in which it states they have retained the certificates but returned the rest of the paperwork. She tried writing to the Chief Registrar at the Bank of England but the letter has been returned.

Has anyone any idea how to calculate roughly how many shares he had, and their value? I've wandered round the internet and am now wondering if £5.25 is 3.5% of their face value making it £150 face value which, given their current price, would be about £108 - but that is a complete guess on my part!

Also how on earth can she go about gettting at the stocks and, given this is likely to be a very small amount, what is the easiest and cheapest way to sell them?

Hannah

oldwiring

For how to get probate values on stocks and gilts http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/shares.htm
this may be of use.

There used to be a witticism that the time to buy War 3.5% was when the price paid equalled the annual yield ( or was less than of course).

HanSpan

oldwiring wrote: »

For how to get probate values on stocks and gilts http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/shares.htm
this may be of use.

There used to be a witticism that the time to buy War 3.5% was when the price paid equalled the annual yield ( or was less than of course).

Thanks for that. I've found the price per share on the date of George's death but we're still stumped about how many he had. However I've found the contact details for Computershare and the executor has phoned them and they re going to send the details. So thanks again to MSE - a mystery solved!
Despite the fact they are not a really good investment, if they really are only worth about £100 I'm tempted to buy them from the estate for entertainment value. If the value is around 77p and the return is 3.5% a year on 100 that makes the return actually 4.55% which is not bad in today's climate. Mind you I think it would mean I'd have to fill out a tax return just for these as I, have no other income I need deal with (all PAYE or bank accounts) so the hassle might not be worth it. I'll wait and see what computershare say.
Thanks again

Taff_major

Hi,

An elderly neighbour has just found a £100 bond for 3.5% War Stocks which is still his mother's name. Is this likely to be a valid certificate, or could it have been cashed in? They have no memory of any interest having been paid, would this only have been done on redemption? If the certificate is still valid, how do they go about cashing it in and how much might it be worth?

Thanks for the advice,

Reaper

Taff_major wrote: »

They have no memory of any interest having been paid, would this only have been done on redemption

Here's a short history lesson:

War bonds started being issued in 1917. Originally they were sold as paying 5% and would be redeemed by 1947. Instead in 1932 the governement shamefully declared they would not honour their debts. They reduced the interest rate to 3.5% and removed the maturity date.

So the short answer is no you can not redeem them though you can sell them to other people on the open market. If the certificate is valid you should have been receiving interest, though perhaps they have just lost track of your details.

I'm not sure how to check if it is still valid (I'm sure somebody will be along soon to tell you) but on Friday £100 bonds were valued at £77.82 on the open market.