Shares bought in family members names

ses6jwg

Hello all.

Unfortunately my granddad was recently diagnosed with terminal bowel cancer. Its very sad news for all my family.

He has quite a large estate and is in the process of sorting things out to make things easier for my mum and auntie. He has some shares in companies he bought in the early 90s such as BT.

The share certificates bear his name, however they are held as "Granddaughter A" account or "Grandson B account". Are the grandchildren the legal beneficaries of these shares or can he just sell them now and they will form part of the estate?

gadgetmind

The shares have been "designated" presumably because they were being held in trust for a minor.

Is there any trust paperwork? I guess the grandkids are no longer minors?

gadgetmind

Oh, and anything sold before he dies will be subject to Capital Gains Tax, so if you do want these to be in the estate, don't sell prior to death.

If the estate is large, seek professional IHT advice now as it could save a lot of money.

xylophone

You need to check whether these were simply "designated" share accounts or whether they were held "in bare trust" for the grandchild concerned.

As I understand it, if simply "designated" the shares and the income thereon belong to grandfather and are included in his estate - if they are held "in bare trust" the shares and the income thereon belong to the child ( the grandfather holds them only as Trustee until the child reaches the age of 18 (16 in Scotland) and so fall outside his estate.

It would seem that if the grandchildren have never received the income on the shares and (one assumes they are now adults) have never been given control of the shares, they were simply designated?

Assuming that Grandpa is well enough to be consulted, what does he say?

barak

xylophone wrote: »

.....As I understand it, if simply "designated" the shares and the income thereon belong to grandfather and are included in his estate

That's my understanding too. They would be held on the shareholder's register in separate account from any held without a designation, but still belong to grandfather. His Will could specify who should eventually inherit them.

ses6jwg

Thanks all. Me and my cousins are all in our 20s now so no longer minors.

It looks like they were simply designated accounts and no trust agreement was drawn up. I'll let him know about the CGT liability

gadgetmind

ses6jwg wrote: »

I'll let him know about the CGT liability

Basically, any capital gains in any assets get "eliminated" at death, which is very handy for shares that have been held for many years/decades as there is no longer any taper relief.

And I still think it's worth getting advice at this stage because it could save a lot of hassle and expense later on.

Knowing his days are numbered must be horrible for everyone concerned, but it does make some IHT issues easier to tackle.

Good luck with whatever you do.

xylophone

As you refer to mum and auntie looking after grandpa's affairs, do I take it that he is a widower?

If so, was his late wife's allowance fully used?http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm

Rather than selling the shares, might he prefer simply to leave them to the grandchildren concerned in his will?