Dividends on death of shareholder

mum2g1b

Looking for a bit of advice about my parents shares.
My parents have wills and my Dad (age 92) is in all probability, likely to die before Mum. He wants to make sure that Mum still gets dividends from shares after he dies as this is their main source of income.

So my question is: when Dad dies his Will states his shares are left to Mum. Will my Mum receive the dividend or will the dividends be frozen til probate and the estate is settled? Will the dividends be paid to the executors (me and my sister) or just held until the estate is settled?

Thanks for any help.

Fenella

I think the shares should be transferred into their joint names NOW.

mum2g1b

Yes that's one option but due to the amount of shares it will be quite expensive- several thousand pounds in Stamp duty. So trying to see if it possible to have the dividends paid to Mum without having to pay thousands to transfer the shares.

John_Pierpoint

I'm no expert but do you pay stamp duty on a simple gift for no consideration?

Admittedly it is a few years ago now, but I remember transferring certificated shares within the family, simply by filling in a form from the registrar.

If everything is neat and tidy at the time of death, the estate is less than £1,000,000 and there won't be any InHeritance Tax (IHT) payable, probate could be a matter of weeks not months.

hellyhelix

When my grandfather died he left his entire shareholding to my mum but had set it up in a trust so that my grandmother had the income from the dividends for the duration of her life. The shares, albeit mum's in name, didn't pass fully to her till gran passed away.

My advice would be to discuss this with your lawyer who will advise on the most tax efficient way to deal with the shares.

moonrakerz

John_Pierpoint wrote: »

I'm no expert but do you pay stamp duty on a simple gift for no consideration?

Don't think so, I transferred shares to my daughter, just filled in the form. No cost involved.

Annisele

Assuming your parents are married (to each other) and live together, I can't see a tax problem if he gives his shares to her. No CGT (HMRC says so here), and you don't pay stamp duty on gifts (see here).

However, I'd second hellyhelix's suggestion to see a lawyer - and I'd also strongly caution against making plans on the assumption that your Mum will die first. Depending on how far you take those plans, it could potentially leave your Dad in an extremely difficult position.