Legal Requirements for Executors Selling Shares Online in Australia

Key Legal Requirements for Selling Deceased Estate Shares

1. Obtaining Probate or Letters of Administration

The first and most crucial legal requirement for selling shares from a deceased estate is obtaining probate. Probate is the court process that verifies the deceased’s will and grants the executor the legal authority to manage the estate’s assets. If the deceased did not leave a valid will, the court may issue Letters of Administration, which give similar legal authority to an administrator.

When Is Probate Required?

Probate is generally required if the deceased held significant assets, including shares, in their name. Many Australian share registries will not release or transfer shares until probate has been granted, as this confirms the executor’s legal authority to sell or manage the shares.

How to Obtain Probate:

• The executor must apply to the Supreme Court of the state or territory where the deceased lived.
• The court will issue a grant of probate, which officially recognises the executor and allows them to sell the deceased’s shares.
• This process can take several weeks, so it’s important to start early if you plan to sell deceased estate shares.

2. Verifying Ownership of the Shares

Once probate has been granted, the executor must verify ownership of the shares. This is typically done through the share registry where the shares are listed. In Australia, companies usually list shares with a specific registry like Computershare or Link Market Services.

Required Documents:

• Grant of Probate: This proves that you, as the executor, have the authority to act on behalf of the deceased estate.
• Certified Death Certificate: This is typically required by share registries as proof that the shareholder has passed away.
• Holder Identification Number (HIN) or Shareholder Reference Number (SRN): These numbers are used to identify the shares on the registry and are necessary for the transaction.

3. Providing Proof of Identity

Australian law requires online share-selling platforms, as well as share registries, to comply with Know Your Client (KYC) and Anti-Money Laundering (AML) regulations. This means executors must provide proof of their identity before they are permitted to sell shares. This process is in place to prevent fraud and ensure that the rightful person is managing the deceased estate.

What Documents Are Required?

• A certified copy of the executor’s identification (such as a driver’s license or passport).
• Proof of address may also be required.
• In some cases, additional identification checks may be needed to meet AML requirements.

These documents can typically be uploaded online if you’re using a platform like Sell My Shares, which simplifies the process of selling deceased estate shares.

4. Tax Obligations and Capital Gains Tax (CGT)

When you sell deceased estate shares, the sale may trigger Capital Gains Tax (CGT) depending on the circumstances. While the deceased is not liable for CGT on assets transferred through their estate, any gains made on shares after the date of death are subject to CGT.

How CGT Works for Deceased Estates:

• The shares are considered to have been acquired by the estate at their market value as of the date of death.
• If the shares have increased in value from that date until the time of sale, the estate may be liable for CGT on the capital gain.
• Executors should calculate the capital gain or loss based on the difference between the sale price and the market value on the date of death.

Executors are required to report capital gains in the estate’s tax return. To ensure compliance with tax laws, it’s recommended to consult with a tax professional or use resources from the Australian Taxation Office (ATO).

5. Communicating with Beneficiaries

As an executor, your legal obligations extend beyond managing the estate’s assets. You must also maintain transparency with the beneficiaries. Before selling the shares, it is important to consult with the beneficiaries to ensure there is a consensus on how the estate will be distributed.

While the executor has the legal authority to make decisions about the sale of assets, it is crucial to keep beneficiaries informed about the sale process, expected timeline, and distribution of proceeds.

6. Selling Shares Online: The Executor’s Responsibility

Selling shares online offers executors a quick and convenient way to liquidate shares, especially when using platforms like Sell My Shares. However, as the executor, you must ensure that the sale complies with all legal requirements, including those set by share registries, Australian taxation laws, and court probate orders.

Here’s how the online process works:

• Register with an online share-selling platform that specialises in deceased estates.
• Provide the required legal documents, including probate, proof of ownership, and identification.
• The platform will handle the sale of the shares and deposit the proceeds into the estate’s account.

Using an online platform is often faster and less expensive than selling through traditional methods, and it ensures compliance with legal requirements.

Conclusion

Selling shares from a deceased estate can seem overwhelming, but understanding the legal requirements simplifies the process and ensures compliance with Australian law. Executors must obtain probate, verify share ownership, fulfil tax obligations, and meet documentation requirements to legally sell deceased estate shares. By using a regulated online platform like Sell My Shares, executors can streamline the process and focus on distributing the estate’s assets fairly.

Taking the time to understand your legal responsibilities will help avoid delays and legal complications, allowing you to efficiently manage and close the deceased estate for the benefit of the beneficiaries.