IHT411 Dividend or interest due to date of death

Pugs2025

Hi

I’m stumped as to what I need to do for this part of valuing the shares on IHT 411. The deceased had shares with 20 different companies. 

I have made a list with each company and : 

- Number of shares
- unit price at date of death 
- value at date of death 
- which registrar each is with 

but how do I find “dividend or interest due to date of death” ? 

I’ve googled and it mentions XD but I’m just still struggling to understand what this means and what steps I need to take to work this out for each company. I’d be really appreciative of some guidance on this one. 

Thank you 

Keep_pedalling

There is a considerable gap between a dividend being declared, going ex_dividend and being paid, and it is the shareholder who holds the share when it is goes ex-dividend who is paid not the shareholder at the time of payment.  If you die between the ex dividend date and the payment the value of each share is in two parts the share value at the time of death and the as yet unpaid dividend. 

For National Grid shares went ED on the 21st Nov with a payment date of 14th Jan. if a holder of those shares died on the 22nd Nov, then there executor would to declare the dividend on the IHT return.

https://www.nationalgrid.com/investors/shareholder-information/dividends/ordinary-shares

If you do a search for each company’s  dividend payments you should be able to find which companies were ED at the time of death and the value of the dividend. 

Pugs2025

That makes so much more sense. Thank you! I really appreciate your help. So if I have understood correctly - for each company i’ll work through and check if the person died between the ex dividend date and the payment date, and if that’s the case i’ll put the dividend amount on the form. 

poseidon1

Not wishing to introduce further complexities with regard to inclusion of accrued dividends and interest at date of death on the IHT return, there is also the additional complication of whether you include the gross ( untaxed) amounts or apply basic rate tax ( 20% for interest and 8.75% on dividends ) to the gross and insert the net amounts less notional basic rate tax.

This  is on the basis of providing a degree of tax relief, on the same income being ultimately axed on a receipts basis in the hands of the PRs.

This was debated at length by professional solicitors and tax practitioners in the specialist Trust discussion forum link below -

https://trustsdiscussionforum.co.uk/t/accrued-income-up-to-date-of-death/16415

The discussion does seem to be almost akin to the question of ' how many angels dance on the head of a pin', but in the end and based on what at that time was originally shown in the accompany notes to IHT400 , one was permitted to deduct 20% from accrued interest and by extension 8.75% from dividends and report the net result on the IHT 100. 

However most unhelpfully the IHT 400 notes are now completely silent on the issue of reporting net, thereby inferring ( deliberately or otherwise)  that gross seems to be the default requirement.

Professionally and personally, I would continue to report on a net basis and declare upfront this is what was done.

It is as well to note, that in the past when both dividends and bank interest were received with tax deducted at source, it was always these net amounts reported on the IHT return, so a notional deduction  for basic rate tax now seems wholly consistent. however  I would not do this for divs/interest in an ISA since it would not have been taxed on the deceased and  that income continues to escape tax on the estate for up to 3 years post death.

By the way it does not seem to matter that unwrapped accrued divs/interest may escape being taxed on PRs if below the annual £500 de minimis ( used to be £100), that is perhaps the unintended consequence of HMRC providing that relief to PRs.

I am little surprised your query does not arise more often given that DIY probate by non experts is becoming more common and actively encouraged on this forum. Perhaps individual share ownership is still very much a small 'minority sport' so the x div question is rare, but most deceaseds have bank deposit accounts, so one can only speculate has to what others have been doing by way of the IHT reporting in  that regard.

In passing and as an aside, IHT on divs and interest may soon be a problem for administrators of SIPPs if the chancellor ultimately has her way in extending the IHT regime to pension pots, with no concessionary changes for the treatment of accrued income..

ColinGala

This site should be very useful to you https://www.dividenddata.co.uk . You can search each individual company and it tells you the XD date

ColinGala

"So if I have understood correctly - for each company i’ll work through and check if the person died between the ex dividend date and the payment date, and if that’s the case i’ll put the dividend amount on the form"

Almost correct....If the person died before the last XD date then a dividend is due. This may already have been paid to their account before the death date  (depends on the payment date) and, if so, doesn't need to be recorded. If the payment date is after the death date then the amount should be recorded on the form

You can check with the broker of the account (they provide you with details once they have been informed of the death) which dividends have already been paid. If it hasn't been paid yet, and a dividend is due, then you should record the amount on the form