How to evaluate shares for inheritance

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Published: 08/15/2018

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Shares, along with other property, are part of the inheritance estate. To register inheritance rights to them, it is necessary to go through the procedure for evaluating shares. Based on the assessment made, the notary will calculate the amount of the state duty that the heirs will have to pay to enter into inheritance rights.

• Rules for inheriting securities
• Features of stock valuation for a notary
• What influences the market price of shares?
• Shares under a will: valuation for a notary
• What documents must be provided to the appraiser?
• Cost of stock valuation for a notary
• What should an assessment report look like?
• An example of calculating state duty when inheriting shares

Rules for inheriting securities

The estate includes real estate, shares in a business, cars, jewelry, bank accounts and other assets. Shares are no exception and are inherited on the same basis as other property and debt obligations.

Shares are securities that secure the rights of their owner to receive profit in the form of dividends to participate in the management of the company. There are preferred shares (which do not give the right to participate in management, but guarantee the receipt of income) and ordinary shares.

You can also distinguish registered shares, which are registered in the register for a specific individual or legal entity, as well as bearer shares, which allow their sale on the secondary market without re-registration of the owner.

Another criterion distinguishes between quoted and unquoted shares. The first type is traded on world stock markets, the second are usually issued by small regional companies and are of no interest or value to the world community.

In order to become the full owner of shares and to receive them as an inheritance, the heir must go through the following stages:

1. Contact a notary with an application to open an inheritance case and issue a certificate of inheritance.
2. Prepare a set of documents confirming the right to receive an inheritance.
3. Request from the registrar an extract confirming the size of the block of shares that belonged to the testator (the shares are blocked until the inheritance rights are assumed).
4. Go through the stock assessment procedure.
5. Pay the state fee for issuing a certificate of inheritance.
6. Obtain a certificate of inheritance indicating the number of shares that will pass to the heir.

After the shares are inherited, their new owner is vested with the full range of shareholder rights. He can participate in shareholder meetings and resolve important issues regarding the company's activities that are put on the agenda.

Based on the results of each financial year, the owner determines the amount of dividends (or income from the company’s activities). The resulting profit is divided among shareholders based on the number of securities they own. The death of the previous owner of shares does not affect the calculation of dividends.

If necessary, the new owner of the shares can dispose of them at his own discretion. He has the right to donate them, sell them or transfer them under a will.

Is it possible to inherit shares?

Shares are securities that secure the owner’s rights to a share in the capital of a joint-stock company. The owner of shares is called a shareholder.

Each shareholder has the right to receive regular profits from the enterprise. The payment is called dividends. The procedure for paying dividends is established by the Charter of the enterprise, but at least once a year.

The shareholder can dispose of the shares in full. He has the right to donate, sell, bequeath all or part of the shares. Shares of commercial enterprises can be an independent object of inheritance without any restrictions (Article 1176 of the Civil Code of the Russian Federation).

The heir becomes a full-fledged participant in the joint-stock company after completing the papers with a notary and entering the necessary data into the register of shareholders. Read more about the procedure for inheriting shares by law.

Features of stock valuation for a notary

The most common purpose of stock valuation is to receive an inheritance. In this case, the assessment is formal: the heir is given an expert opinion on the value of the set of shares that belonged to the testator.

There are several methods for evaluating shares; the choice of the optimal one is determined by the characteristics of the presence of shares on the stock market. To determine the value of shares, the stock market is analyzed and the average quote at the time of the valuation (at the date of death of the testator) is determined.

If the shares are not quoted, then the valuation is much more difficult. It will be necessary to conduct a comprehensive analysis of the company's business, its profitability, general market conditions, etc. At the next stage, the value of the entire business is established, and then the part that accounts for the block of shares.

Securities are usually valued using the following algorithm:

1. The market in which the company operates is analyzed (an in-depth analysis of the industry is carried out) at the country or regional level (depending on the scale of activity).
2. The financial activities of the company and its dynamics are analyzed.
3. The cost approach is used: the potential benefit from the sale of all assets of the enterprise.
4. The market valuation method is used - how much companies of similar scale are sold on the market.
5. The income assessment method is how much money is required to invest in a specific business and get a return on this investment.
6. obtained as a result of applying all approaches is reconciled

The value of shares for evaluation is made using a simplified algorithm and does not require serious detail.

Receipt options

Receiving securities as an inheritance is similar to other property. If the deceased left a will, then the distribution of the inheritance is made in accordance with his will. The entire inherited estate is distributed at the request of the testator, and not only relatives, the state, but also strangers can become legal successors. Along with the entire inheritance mass, securities are also distributed.

The only category of heirs that has the right to a share, regardless of whether they are mentioned in the will or not: minor children of the deceased, dependents. They are entitled to ½ of the share prescribed by law.

In the case where the deceased did not have time to express his will on the distribution of the inheritance, it is divided according to the law, starting with close relatives. This category includes natural and adopted children, parents, and spouses.

What influences the market price of shares?

There are several types of share prices:

1. Par value is the value indicated on the front side of the share, calculated taking into account the size of the company's authorized capital (does not reflect the actual selling price of the share).
2. The issue price of shares is the price of shares at the initial placement at which the holder purchased them.
3. The market value of shares is the actual selling and buying price of shares on the market.

To calculate the state duty when registering an inheritance, it is necessary to calculate the market value of the share.

The market value of shares is influenced by a complex of factors, including:

1. Circulation of a block of shares on world stock markets , stock indices.
2. Demand for the proposed product of the enterprise (or service) in the world market.
3. Technical factors.
4. Buyers' mood.
5. Company profitability and dynamics of financial indicators.
6. Company prospects.
7. Asset size at fair market value.

Thus, valuing a stock is in many ways similar to valuing a company's business as a whole. In general, the balance of supply and demand has a key influence on the market value of shares.

When is an assessment required?

According to current legislative acts, determination of the real value of shares by independent specialists is necessary when:

• purchase, sale, restructuring of a business or a separate part of it;
• registration of donation and rent agreements;
• sale, exchange, and other forms of alienation of shares to third parties;
• formation of authorized capital by securities;
• transfers as collateral;
• privatization of the enterprise.

Of particular note is the valuation of shares for a notary by inheritance, which is carried out on average in 1-2 days. The amount of the state duty that the heirs will have to pay for their copy of the certificate will depend on the final amount. It is calculated according to the rules provided for in Art. 333.24 of the Tax Code of the Russian Federation. Moreover, the tariff is influenced by the degree of relationship with the deceased.

Shares under a will: valuation for a notary

Shares can be inherited by law or by will. In the first case, they go to the relatives of the testator (taking into account the principle of priority, when the right to inheritance passes to the heirs of the second stage only in the absence of the first, etc.), in the second - to any person specified in the will of the deceased.

The testamentary procedure for the distribution of property takes precedence over the legal one. This means that if there is a valid will, the shares are distributed in the order specified in the last will.

Regardless of the order of inheritance, a mandatory step is to go through the stock valuation procedure. It is required for the subsequent calculation of the state duty for issuing a certificate of inheritance. The amount of state duty is calculated as follows:

• 0.3% of the value of shares for immediate relatives (parents, children, spouses, brothers and sisters), but not more than 100 thousand rubles;
• 0.6% - for other heirs , but not more than 1 million rubles.

Valuation of shares for inheritance purposes can only be carried out by an independent valuation company that is authorized to provide this type of service. The heir himself has the right to carry out an independent analysis, but his conclusions cannot be the basis for calculating the state duty.

The heir has the right to order a report on the valuation of shares from any appraisal company that is a member of the SRO of appraisers (today the licensing of appraisal activities has been abolished). The notary has no right to influence the choice of an appraisal company by the heir.

The heir should focus not only on the pricing policy of the selected company, but also on its experience and reputation in the market. Otherwise, there is a high risk of delaying deadlines or providing false data.

Valuation of shares during inheritance under a will includes the following stages:

1. Conclusion of an agreement for the provision of appraisal services.
2. Determining the number of shares and the optimal valuation method depending on the quote of securities on the stock market.
3. Preparation of a written assessment agreement , its certification and transfer to the customer.

Expenses of heirs

One of the main points when registering an inheritance is paying the state fee. The amount of the state duty directly depends on the degree of relationship with the deceased citizen.

Basic rates:

1. 0,3% – the rate is provided for family members of the deceased subject. Priority heirs include children, parents, and spouses. Also, a preferential rate is provided for brothers/sisters of the testator. When calculating the tax, the fixed percentage and the cost of securities are taken into account. However, the law contains a limitation on the maximum amount of the fee. It should not exceed 100,000 rubles.
2. 0,6 % – the rate is provided for all other legal successors (individuals and legal entities, authorities). The rule on limiting the amount of state duty also applies here. The limit amount is 1,000,000 rubles.

The basis for calculating the duty is the valuation of the deceased owner's shares. Therefore, before entering into an inheritance, it is necessary to assess the value of the securities owned by the testator.

What documents must be provided to the appraiser?

To initiate the assessment procedure and conclude an agreement with the appraiser, the following set of documents is required:

1. Death certificate of the testator.
2. Customer's passport.
3. An extract from the register of shareholders , which serves as confirmation of the fact that at the time of the death of the testator he owned a certain block of shares.

The appraiser may additionally request other documents that he will need for the assessment: information on fixed assets, information on the issue of shares with copies, reports on issued shares, accounting and financial reports, data on the company’s assets and debts, etc.

The assessment period usually takes 3-5 business days. The assessment is made as of the date of opening of the inheritance (date of death of the testator). If you have all the necessary information to carry out valuation activities on the stock market, an assessment can be obtained within a few hours.

How to take part in the General Meeting of Shareholders of PJSC Gazprom?

The list of persons entitled to participate in the Meeting is compiled on the basis of data from the register of shareholders of the Company as of the date determined by the Board of Directors in preparation for the Meeting.

Based on clause 2 of Art. 60 of the Federal Law “On Joint-Stock Companies”, shareholders specified in the list of persons entitled to participate in the Meeting are sent, including voting ballots on agenda items, no later than 20 days before the date of the Meeting by registered mail. When summing up voting results, votes represented by voting ballots received by the Company no later than two days before the date of the Meeting are taken into account.

A notice of the Meeting, including information about the time of registration of the Meeting participants, is also posted on the Internet information and telecommunications network on the Company’s website () no later than 30 days before the date of the Meeting.

Shareholders wishing to take part in the Meeting in person must appear at the specified time for registration of participants in the Meeting with an identification document.

Currently, the total number of shareholders of the Company exceeds 500 thousand. Taking this into account, shareholders are recommended to exercise their rights to participate in the Meeting through their representatives by proxy or send completed voting ballots to the Company.

Cost of stock valuation for a notary

The cost of valuation of shares upon entry into inheritance rights is not regulated at the federal level in any way. It depends on the pricing policy of the company that provides appraisal services.

Typically, the valuation of unquoted shares on the open market is higher than those that are listed. This is due to the fact that unquoted shares require more detailed and complex analysis. Valuation of shares for registration of inheritance is always cheaper than valuation before concluding a purchase and sale agreement or registering shares as collateral.

Valuation measures will cost the heir approximately 1-3 thousand rubles. In particularly difficult cases, costs for appraiser services can increase to 10 thousand rubles. In general, the cost of work depends on the complexity, completeness and accuracy of the information available to the appraisers.

The costs of the assessment are borne entirely by the heir. If there are several of them, then they have the right to divide them in any format.

Dates

After the death of the testator, applicants for the inheritance declare their recognition as heirs. They write statements in a notary's office and on their basis an inheritance case is opened. The notary has 6 months to review it. During this period, the heirs must prove with documents that they have the right to their share.

The valuation of securities for inheritance is carried out during the same period. The heirs must decide on the executor and pay for the examination. A report on the calculations carried out is attached to the documents of the inheritance case. A competent assessment and detailed analysis of the value of securities will allow the inheritance to be distributed as fairly as possible.

At the end of 6 months, the notary issues certificates of the right to inherit to the applicants.

At their request, this can be one document with certified copies or a separate certificate for each. It describes the share of an estate that is awarded by law or by will.

You can read how to evaluate a car in the article “Why is it necessary and how to evaluate a car when entering into an inheritance.” You can find out how property is assessed for inheritance here.

What should an assessment report look like?

The assessment report is drawn up in a special form in accordance with the requirements of Federal Law No. 135 “On Valuation Activities”.

The report consists of 20-80 pages and is devoted to the justification of the assessment made for inheritance purposes. Each page of such a document is numbered. The report will contain an indication of the purpose of generating the report, a description of the approaches used, source data, the progress of the calculations performed and the results obtained. Data must be reliable and easy to verify.

The report must be bound and sealed by the appraiser. The assessment report has a limited validity period. According to the Federal Standard, the report is valid for no more than six months.

The notary has no right not to accept a report that meets all the requirements of the law and provided that the heir confirms the appraiser’s membership in the SRO, even if he does not agree with the assessment made.

Features of adjusting personal account parameters at the registrar JSC "DRAGA"

To verify the parameters of a shareholder’s personal account with the registrar - JSC DRAGA, the shareholder must fill out and send the following documents to the registrar:

Registered person questionnaire (for individuals) (PDF, 297.5 KB)

A sample of the shareholder's signature on the Questionnaire must be notarized (if the Questionnaire is not filled out in the presence of a registrar's employee). The date (day, month, year) of signature verification must be indicated in words. The last name, first name and patronymic of the notary certifying the signature, as well as the person whose signature is being certified, are also indicated in full.

Clause 7 of the Questionnaire indicates the address of the place of registration and place of residence of the shareholder according to the passport, and clause 8 indicates the address of the place of his actual residence/registration/stay. Clause 9 of the Questionnaire specifies the postal address for sending correspondence to the shareholder, as well as dividends by postal order (if the shareholder has chosen a postal order as a form of payment of dividends).

Please pay attention to clause 13 of the Questionnaire “Dividend Payment Form”. If you choose the “Bank Transfer” form of dividend payment, then in paragraph 14 of the Questionnaire you will need to indicate the details of your bank account necessary for this.

Identity document - a copy certified by a notary.

If there is no valid passport information on page 19 at the time of purchase of shares, you must additionally provide a certificate of change of passport containing information about the current passport and the previous passport, including all intermediate passports. The certificate must be signed by an official and sealed; the original certificate or a copy certified by a notary must be provided.

In case of changes in last name and/or first name and/or patronymic that have occurred since the acquisition of shares, it is necessary to provide a document confirming the changes (original or notarized copy).

The completed Application Form must be submitted to the registrar in one of the following ways:

• send by mail to the registrar's addresses - in this case, a sample of your signature on the Application Form must be notarized. Notarized copies of documents must be attached to the Application Form;
• submit in person by appearing at the registrar's addresses. In this case, operations in the register can be carried out on the basis of original documents and the attachment of notarized copies of documents to the Questionnaire is not required;
• submit through your representative authorized by a power of attorney, for which the representative must personally appear at the registrar's addresses with the necessary documents.

JSC "DRAGA"

st.
Novocheremushkinskaya, 71/32, Moscow, 117420 Phone for inquiries: +7

List of branches of JSC DRAGA (PDF, 100.4 KB)

Order to perform a transaction (PDF, 259.6 KB)

To be completed if you wish to receive a document confirming ownership of shares

In the columns “Registered person” and “Order provided” you should indicate your last name, first name, patronymic, and passport details. You must put your signature on the back of the order, and it must match your signature on the Registered Person’s Application Form.

Payment form with details of the head office of JSC DRAGA (PDF, 96 KB)

After the registrar receives the specified documents and payment receipt, your data in the register will be edited, and you will be sent an extract from the register of shareholders of PJSC Gazprom.

We would like to inform you that it is the responsibility of the shareholder to timely provide information about changes in his data (passport data, place of residence, bank details for non-cash payment of dividends, etc.). If a shareholder fails to provide information about changes in his data (in accordance with clause 5 of Article 44 of the Federal Law of December 26, 1995 No. 208-FZ “On Joint-Stock Companies”), PJSC Gazprom and the registrar are not liable for damages caused in connection with this losses, including those associated with non-payment or late payment of dividends.