When an M&G investor dies

Transcription

1 When an M&G investor dies We have produced this booklet to help those handling financial arrangements after an M&G investor has died. We intend this booklet to support, rather than replace, our personal service to you.

2 Informing M&G Knowing what your options are will help you make the right decisions at a difficult time You shouldn t make any important decisions about the investment until you are ready and we won t ask you to do so. On this page we set out the few basic things you need to do first, and explain how we will continue to take care of the investment for you until you are ready to make any further decisions. Confirmation in writing You may have telephoned us in order to inform us of the death, but we also require written notification and the original death certificate so that we can be sure that we have recorded all the details accurately. On page 4 you will find a table showing which items of M&G paperwork you may need. Please quote any M&G client references and as many details as you can about the investments in any written correspondence to us. The death certificate For investments in a single name For sole holdings, please send the original death certificate and the Grant of Representation once you receive them. We will return these documents to you promptly. For joint investments If the investment is held jointly with another person(s), legal ownership will transfer on death to the remaining holder(s). All that you need to send us is the original death certificate which we will return to you promptly. The table on page 6 summarises what happens during this period. Certificate copies You should obtain sufficient copies of the death certificate from the Register Office at the outset, as the price of obtaining copies increases sharply as time goes by. You can order copies of the certificate by post or phone, or you can order them online, which could be cheaper. Visit for up-to-date prices. Valuing the estate You will need to know the exact value of the estate at the time of death, as this is the basis for calculating any inheritance tax liability. If the estate is small, you may not need a Grant of Representation (see page 5). Different companies have different definitions of small. In our case it is where the total value of the M&G investment is 36,000 or less regardless of the value of the total estate. Contents Table of M&G investments and the related paperwork 4 The period between informing M&G and obtaining a Grant of Representation 5 The Grant of Representation 7 Handing investments over to the beneficiaries 8 How to contact us back cover 3

3 Table of M&G investments and the related paperwork Finding useful information The table below shows the documentation that we issue for each type of investment. Locating these will greatly assist you in dealing with the investment. Type of investment OEIC (Open-Ended Investment Company) The M&G Savings Plan The M&G ISA (Individual Savings Account) Documents We issue a detailed acknowledgement when each investment is made. We issue statements semi-annually, showing all the assets held. We issue tax vouchers annually in April (sent with the semi-annual statement). We issue a detailed acknowledgement confirming the regular investment or when each lump sum investment is made. We issue statements semi-annually, showing all the assets held. We issue tax vouchers annually in April (sent with the semi-annual statement). We issue a detailed acknowledgement confirming a monthly investment or when each lump sum investment is made. We issue statements semi-annually, showing all the assets held. Please note: These documents will help you find details, such as an M&G client reference, that will assist us in dealing with the investment. We have not issued certificates for any new holdings since 2 January There is no need to return any of these documents to us. 4

4 The period between informing M&G and obtaining a Grant of Representation What we do first As soon as we receive your letter informing us of the death, together with the original death certificate, we will send you details of the person s investment with us. This will include the investment value at the date of death. Direct Debit If we have been collecting regular contributions into an ISA or M&G Savings Plan by Direct Debit from a bank or building society account for the investor, we will stop collecting as soon as we are formally notified of the death and have received the original death certificate. For investments in a single name OEIC If the investment is held in the investor s name only, once you inform us of the death and send in an original death certificate we do not need anything more from you for the time being. We will hold the investment and any income that becomes payable until you obtain a Grant of Representation and can instruct us to pass it on to the beneficiaries. ISAs The tax position of an ISA investment ceases to apply at the date of death. From that time, we can no longer pay gross distributions (if applicable). Where a gross payment has been made after the date of death, the taxable element will be declared to the executor as it is the responsibility of the personal representative to declare tax to HM Revenue & Customs. Once we have been formally advised of the death through receipt of written notification and the death certificate we no longer pay gross distributions and net distributions will be reinvested until we receive your instructions. The investment will be treated in the same way as any other holding of the estate for Income Tax and Inheritance Tax. Small estates: no Grant of Representation to be obtained If the total value of all of the M&G investments owned by the investor is less than 36,000, you may not need to obtain a Grant of Representation and can instead allow the next-of-kin to deal with the M&G investment. If you wish to handle an estate in this way, please contact our Customer Relations team on The investments Apart from holdings in joint names (see page 3), we are not permitted to pass any assets to their new owners until you have completed the formalities of obtaining a Grant of Representation that is Probate, Letters of Administration or Certificate of Confirmation (for investors in Scotland) or fulfilled the small estates requirements (see above). 5

5 Making changes in this period After we are notified of the death, the investments continue to have the opportunity to grow and earn money as before. Please remember that prices may fluctuate and the value of the original investment may not be retained. If you are considering withdrawing, please bear in mind that we cannot accept an instruction until we have received a sealed copy of the Grant of Representation (if applicable) and authority to pay it to the authorised executors. Joint holdings (OEICs and Sole holdings (OEICs and ISAs The M&G Savings Plan) The M&G Savings Plan) Notify us of the date of death, quoting the M&G client reference if possible, and include an original death certificate. This is all you need to do at this stage. The holding will then be transferred to the remaining holder(s). We will amend the register to show the name(s) of the remaining holder(s) only. We will send confirmation of the new holder s/holders registration details. You will not need to contact us again. Notify us of the date of death, quoting the M&G client reference if possible, and include an original death certificate. This is all you need to do at this stage. A letter will be sent to you quoting the valuation of the holding at the date of death for Probate purposes. The register will be updated to show that the investor has died. You will not need to make any decisions about the holding until you are ready to distribute the estate to the beneficiaries. While you prepare to wind up the estate, the holding will continue to benefit from M&G s investment expertise. Please contact us again once you have Grant of Representation, Letters of Administration or Certificate of Confirmation (Scotland). Notify us of the date of death, quoting the M&G client reference if possible, and include an original death certificate. This is all you need to do at this stage. A letter will be sent to you quoting the valuation of the holding at the date of death for Probate purposes. The register will be updated to show that the investor has died. The tax benefits that apply to an ISA will stop at the date of death, but the holding will otherwise continue to benefit from M&G s investment expertise. You will not need to make any decisions about the holding until you are ready to distribute the estate to the beneficiaries. Please contact us again once you have Grant of Representation, Letters of Administration or Certificate of Confirmation (Scotland). For other assets we recommend that you consult your legal adviser or visit a Citizens Advice Bureau. 6

6 The Grant of Representation Your next steps will be: To attend to any inheritance tax liability and/or other tax matters; and To obtain a Grant of Representation, which gives executors or administrators the legal authority to distribute the estate to the beneficiaries. We are not able to help you directly with these processes, but we can provide any information you need about the M&G investments included in the estate. Once you have obtained: Probate (if there is a will); or Letters of Administration (if there is no will); or A Certificate of Confirmation (Scotland) Authority From this point we can accept the instructions of the executors or administrators for the future of the investments. Once the executors or administrators are ready to distribute the estate, we will be able to accept their authorised instructions. If the Grant of Representation was obtained abroad If authority to act for the late investor was granted abroad ( abroad includes the Channel Islands, Isle of Man and the Republic of Ireland), please contact our Customer Relations team to discuss your specific situation. For the estate, you will need to send us an official copy of the document, bearing the Seal of the Court, which the Probate Registry will provide. Once recorded we will return it to you. 7

7 Handing investments over to the beneficiaries Once you are ready to distribute the estate, we will accept the executors or administrators instructions to transfer or sell the investments. Below and on the following pages we explain how you may pass investments to those who are to inherit. Transferable investments Please read the following notes in conjunction with the table on page 10. Note 1. Transferring an OEIC investment to a new owner A beneficiary may prefer to inherit a holding rather than receive cash, and you may transfer an investment directly to the person who inherits. (a) If the executors/administrators are the beneficiaries If the executors/administrators are the beneficiaries and all wish to retain the holdings, we can transfer investments very simply. Each executor or administrator should complete a Stock Transfer Form. Where there is more than one executor and only one beneficiary, we will need a completed Stock Transfer Form signed by all the executors. The beneficiary will then become the outright owner of the M&G investment and will be able to receive statements of the investment. (b) If a specific investment has been left to one beneficiary If the beneficiary has been left a specific investment, you can transfer it directly to him or her without any sale, by completing a Stock Transfer Form. The beneficiary will become the outright owner and will not have to pay any entry or exit charges which have been waived. We will make the transfer and send the new owner an acknowledgement of the investment. (c) If a specific investment is to be divided between two or more beneficiaries You will not need to sell in order to divide the investment between two or more beneficiaries, as we can transfer a proportion to each person. Each beneficiary will become the outright owner of part of the M&G investment, and will not have to pay any entry or exit charges which have been waived. If you are dividing the investment between several new holders, please check the minimum holding limit for that fund/product (our Customer Relations team can give you details on request). In most situations we cannot create a new holding below that minimum, but in some instances we can make concessions for the beneficiaries when an investor dies. If you need to consider small divisions, please contact us and we will endeavour to accommodate your needs. (d) If a specific cash sum has been left If a beneficiary has been left a specific cash sum, he or she may prefer to receive an M&G investment in its place. On transferring the title, the beneficiary will not have to pay any entry or exit charges which have been waived. Provided the beneficiary agrees, you can pass the inheritance to them entirely in investment form (see (b)) or partly as investments and partly cash. (e) If the M&G investments form part of the residue of the estate If you need to distribute all the remaining assets of the estate to one or more beneficiaries, you will not need to sell unless the beneficiary requires a cash payment. You may transfer the remaining holdings directly to each beneficiary, as described in notes (b) and (c). 8

8 (f) If the will creates a trust or leaves money for children If the beneficiary is a trust or a person under the age of 18, you can instruct us to transfer the holding into the names of the trustees or guardians. They will be the registered owners of the investment and we will act upon their instruction regarding the investment. Note 2. Transferring an ISA investment to a new owner* (a) To register the executors/administrators as beneficiaries We require a letter signed by the executors/ administrators. The holdings will lose their ISA tax-efficient status and be issued as OEIC holdings. If the beneficiary wishes to transfer the holding into an ISA in his or her name we will need a completed ISA application form with the letter. The holding will count towards the beneficiary s ISA allowance for the current tax year. (b) To register the holding in a different name We require a letter signed by the executors/ administrators. The new holdings will lose their ISA tax-efficient status and be registered as OEIC holdings. If the new holder wishes to transfer the holding into an ISA in his/her name, we will need a completed ISA application form with the letter. *Whilst the investment is being transferred it will be out of the market for a short period of time and will not lose or gain in value. On transferring the holding, exit fees may apply. The Additional Permitted Subscription (APS) ISA is an allowance available to the spouse or civil partner of an ISA holder who has died on or after 3 December The allowance is not dependent on inheriting ISA holdings. For more information, please see the APS ISA allowance flyer. Note 3. Selling investments You can sell all or part of the investment. Once we have received the Grant of Representation, you can sell the investment by instructing us to do so in writing, making sure to include: The M&G client reference(s) The name of the deceased Details of the shares to be sold The date and signature of all appointed executors or administrators. We also have a withdrawal form that you could complete and send to us, if you prefer, which can be downloaded from or requested from our Customer Relations team. If the investment is held directly in an OEIC (outside of The M&G ISA or The M&G Savings Plan) you can also instruct a sale over the phone. We will then sell the investment and send the proceeds to you by cheque payable to the first executor as named on the Grant of Representation. Note 4. Arranging the transfer/sale Regardless of how you need to distribute the investment, simply let us know what you want to do when you are ready. The Completing a Stock Transfer Form booklet contains further information about transferring investments. If the person inheriting would like to consider using this investment as a basis for his or her own ISA or savings plan, please call us. We will be able to explain the options and provide the information they need. When you return the completed form(s), we will re-register the investment in the name of the new owner. We will provide each new M&G investor with information about their investment and will send them details directly in future. 9

9 With large estates there may, on rare occasions, be a capital gains tax or inheritance tax reason to sell the investments and pass on cash with which the beneficiary then buys back an equivalent investment. This is only cost effective if the tax benefits outweigh the setting up cost of the new investment. If the asset has gained value since the date of death, the estate can sell and use its own annual capital gains tax exemption against the gain. Your financial adviser can check this for you. If you need to divide the investment among several people, you may arrange that each receives specific holdings or that each receives a specific share of each holding. If you need up-to-date information on investment values and accumulated income to help you decide on the final arrangements, we will be happy to provide this on request. The type of investment held Any OEIC holding, including holdings that were previously held within an M&G ISA* or an M&G Savings Plan Investment trust units previously held in The M&G ISA* Pass a specific investment to one person Transfer the holding directly into the person s own name. We will send statements on a semi-annual basis. The person may arrange to use the savings facility, if they wish. See Note 1(b). Transfer the holding directly into the person s own name. The new owner will receive an investment acknowledgement**. What you need to do if you would like to: Divide a specific investment between two or more people Pass a specific cash sum to a person Pay a bequest for a child or a trust Transfer part of the holding directly into each person s own name. We will send statements on a semi-annual basis. Each person may arrange to use the savings facility in future, if they wish. See Note 1(c). If the person prefers, they can transfer a holding of that value directly into the person s own name, as above, or sell shares to that value and pay the cash. See Notes 1(d), 2 and 3. Transfer shares to that value to the trustee(s) appointed in the will. We will send the trustee(s) statements on a semi-annual basis. See Note 1(f). Transfer part of the holding to each person in their own name. Each new owner will receive an investment acknowledgement**. If the person prefers, they can transfer a holding of that value directly into a person s own name, or sell shares to the value and pay cash. Transfer shares to that value to the trustee appointed in the will. See Notes 3 and 4. Pass the APS ISA allowance to a surviving spouse or civil partner The ISA regulations allow for the surviving spouse or civil partner (who are not legally separated) to receive an additional tax allowance on top of their annual ISA allowance. This additional ISA allowance, known as Additional Permitted Subscription (APS), is only available where the date of death of the account holder was on or after the 3 December 2014 and is based on the value of the ISA investments as at the date of death. For more information, please see the APS ISA allowance flyer. *Upon death, the holding will lose its tax-efficient status. **These are the responsibility of the relevant registrars. 10

10 How to contact us Customer Relations * If you have a query regarding an M&G investment, our Customer Relations team can be contacted from 8.00am to 6.00pm, Monday to Friday, and from 9.00am to 1.00pm on Saturday. Minicom telephone * If you have hearing difficulties, you can contact us from 9.00am to 5.00pm, Monday to Friday. Our website Visit our website for the latest performance information, fund prices and literature. info@mandg.co.uk us with queries.** Write to us at: M&G Customer Relations PO Box 9039 Chelmsford CM99 2XG * For your protection calls may be monitored and recorded. ** Please note that information contained within an cannot be guaranteed as secure. We advise that you do not include any sensitive information when corresponding with M&G in this way. This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAs and other investment products. The company s registered office is Laurence Pountney Hill, London EC4R 0HH. Registered in England No NOV 16 /