Investment Portfolio in Your Will: Stocks & Bonds UK Guide

James had built a £180,000 investment portfolio over 15 years—stocks and shares ISA, AIM holdings for IHT planning, and a general investment account with blue-chip shares. When he died suddenly at 52, his partner discovered the portfolio was split across three platforms, some in nominee accounts, some jointly held. His 8-year-old will mentioned his "investments" in one generic line.

The three executors spent 14 months untangling which assets were whose, which passed by survivorship, and which needed probate. The legal fees exceeded £8,000.

Meanwhile, his ISA lost its tax-free status on the date of death, and £47,000 in gains became taxable in the estate.

Investment portfolios feel modern and organised—online dashboards, auto-rebalancing, neat percentage allocations. But death is analogue. Without clear instructions about beneficiaries, platform access, and tax planning, your carefully built wealth can become an administrative nightmare.

This guide explains exactly how investment portfolios are treated in UK wills, which assets pass automatically versus through your will, how to minimise inheritance tax, and why you don't need to list every holding to protect your loved ones. Whether you hold £10,000 in a single ISA or £500,000 across multiple platforms, you'll learn how to ensure your investments reach the right people with minimal tax and hassle.

Do Investment Portfolios Need to Be in Your Will?

Your investment portfolio forms part of your estate when you die. Without a will, intestacy rules determine who inherits—regardless of how sophisticated your portfolio is.

According to HMRC, inheritance tax receipts for 2024/25 totaled £8.2 billion, representing a 10.8% increase from the previous year. Much of this comes from investment portfolios that weren't properly planned for.

Many investors assume joint accounts or platform beneficiary nominations replace the need for a will. They don't. Right of survivorship for joint accounts does transfer assets automatically—but it doesn't avoid inheritance tax. The value still counts toward your estate for IHT purposes unless the surviving owner is your spouse or civil partner.

Most UK investment platforms use nominee accounts, which means you legally own the underlying shares despite the platform holding them in trust. These assets pass through your will exactly as if you held the share certificates directly.

Consider Sarah, who died with a £50,000 Hargreaves Lansdown stocks and shares ISA but no will. She was single with no children. Under intestacy rules, her parents inherited everything—but Sarah had wanted her nephew to receive the ISA. Without a will, her wishes meant nothing.

The timing matters too. Your ISA loses its tax-free status on the date of death, starting a three-year "continuing ISA" period during which gains remain tax-free but no new contributions can be made. Without clear executor instructions, this valuable tax wrapper can be wasted.

If you have an investment portfolio worth more than £10,000, you need a will that specifically addresses how those assets should be distributed.

How UK Investment Accounts Are Treated at Death

Different types of investment accounts follow different rules when you die. Understanding these distinctions is essential for proper will planning.

Individual accounts (stocks and shares ISAs, general investment accounts) are straightforward. You own them outright, they pass through your will, and they're subject to inheritance tax above the £325,000 nil-rate band. ISAs become "continuing ISAs" for up to three years, maintaining tax-free growth until distribution.

Joint accounts pass to the surviving owner automatically through right of survivorship, bypassing probate entirely. But here's the critical misconception: they still count toward the deceased's estate for IHT unless the survivor is a spouse or civil partner. The spousal exemption provides unlimited tax-free transfers between married couples and civil partners.

Nominee accounts are how most UK platforms—Hargreaves Lansdown, interactive investor, AJ Bell—hold your investments. Under HMRC guidance on bare trusts, you're the beneficial owner even though the platform holds legal title. These investments pass through your will as if you held the shares directly.

Designated beneficiary accounts are rare in the UK (more common in the US). Some platforms allow beneficiary nominations, but these are typically advisory rather than legally binding. Your will takes precedence.

Capital gains tax doesn't apply on death itself—the beneficiary's acquisition cost adjusts to market value at the date of death. This "step-up" in basis means accumulated gains aren't taxed. However, any gains after death are taxable unless the assets remain in a continuing ISA.

Here's a practical example: Michael dies with a £100,000 portfolio split £60,000 in a joint account with his wife and £40,000 in an individual ISA. The joint account passes automatically to his wife through right of survivorship (no IHT due to spousal exemption). The ISA passes through his will to whoever he's named—subject to IHT if his total estate exceeds the nil-rate band.

The critical point: platform structure matters less than ownership structure. Focus on who legally owns what, not which website displays the account.

ISA Inheritance Rules: Cash ISAs, Stocks & Shares ISAs, Lifetime ISAs

ISAs aren't automatically inherited. The account closes on death, and the value becomes part of your estate. But the treatment differs dramatically depending on who inherits.

For spouses and civil partners, the Additional Permitted Subscription (APS) provides a valuable benefit. According to gov.uk guidance on inheriting an ISA, the surviving spouse receives an ISA allowance equal to the higher of the ISA value at death or at closure. This adds to their normal annual ISA allowance.

If Sarah dies with a £120,000 stocks and shares ISA, her husband can contribute an additional £120,000 to his own ISA through APS—even if he's already used his £20,000 annual allowance. That's a total £140,000 ISA allowance for that year.

The time limits matter: you must use the APS within three years of death or 180 days after estate administration completes, whichever is later. Miss this deadline and you lose the allowance permanently.

For other beneficiaries—children, unmarried partners, friends—the situation is different. They inherit the cash value but not the ISA wrapper. Any gains within the ISA after death become taxable. They receive no special allowance. The inheritance is subject to IHT above the nil-rate band.

The continuing ISA period provides some protection. The ISA doesn't close immediately—it remains open earning tax-free returns for up to three years. No new contributions are allowed, but the existing investments can grow tax-free while executors manage distribution.

This creates a significant planning opportunity for married couples. A £120,000 ISA inherited by a spouse saves up to £24,000 in potential capital gains tax over time (assuming a 20% CGT rate on gains that would otherwise be taxable). The same ISA inherited by a child provides no ongoing tax advantage once distributed.

A common mistake: assuming platform beneficiary nominations automatically transfer ISA status. They don't. Only spouses and civil partners receive the APS allowance, and this happens through estate administration, not platform settings.

If you're married or in a civil partnership, your will should consider the APS benefit when deciding how to allocate ISA holdings. If you're single, understand that your ISA beneficiaries will receive cash value only, not the tax wrapper.

AIM Shares and Business Property Relief: Changes from April 2026

AIM (Alternative Investment Market) shares have historically been popular for inheritance tax planning. That's changing dramatically.

Currently, AIM shares held for two years or more qualify for 100% Business Property Relief, making them completely exempt from inheritance tax. This has made AIM portfolios attractive for investors concerned about IHT on estates exceeding £325,000.

From 6 April 2026, following the Autumn Budget 2024 announcement, AIM shares will receive only 50% BPR. The effective IHT rate becomes 20% rather than 40%—still better than mainstream stocks, but nowhere near the previous exemption.

The timing creates a critical trap: any AIM shares purchased after 30 October 2024 will never qualify for 100% relief. Even if you die before April 2026, you can't meet the two-year holding requirement before the new rules take effect.

Additionally, AIM shares don't benefit from the new £1 million BPR allowance introduced in the same budget. That allowance applies only to completely unlisted shares and agricultural property—not AIM-listed securities.

Here's the practical impact: Emma holds a £200,000 AIM portfolio accumulated over five years. Under the old rules, she'd pay £0 inheritance tax (100% relief). Under the new rules from April 2026, her estate pays £40,000 IHT (20% effective rate after 50% relief). That's a £40,000 difference.

This changes the estate planning calculus significantly. AIM shares remain more tax-efficient than mainstream stocks (20% versus 40% IHT), but the "IHT-free inheritance" strategy is ending.

AIM shares still pass through your will normally—BPR is a valuation relief, not an ownership bypass. If you hold AIM shares specifically for IHT planning, you might want to ring-fence them for particular beneficiaries in your will. And if you're considering buying AIM shares for tax purposes, understand the relief has been substantially reduced.

The broader lesson: tax rules change. Your will needs to be flexible enough to accommodate changes in reliefs and allowances without requiring constant rewrites.

What You Should and Shouldn't List in Your Will

You don't need to list every stock ticker and fund holding in your will. That would be impractical and outdated within days.

Do list broad categories: "my stocks and shares ISA held with Hargreaves Lansdown", "my investment accounts with interactive investor", "my shareholdings in [specific company if substantial]". Describe accounts by type and platform, with named beneficiaries for each category.

Don't list individual holdings: ticker symbols, specific share quantities, fund names (these change constantly), current portfolio values (outdated immediately). Your will should describe containers, not contents.

Generic language creates ambiguity. "All my investments" becomes unclear if you have multiple platforms or account types. Be specific about categories while remaining flexible about holdings.

The "switching platforms" concern is common: what if you move your ISA from Vanguard to Fidelity? Your will remains valid as long as the description is functional. "My stocks and shares ISA" covers whichever provider holds it at death. The account type matters, not the provider name.

Consider this template language:

"I give my stocks and shares ISA held at Hargreaves Lansdown to my daughter Emma Johnson absolutely. Should this account not exist at my death, this gift shall lapse and fall into my residuary estate."

The lapse clause protects against account closure. If you've closed that specific ISA, the gift fails gracefully and the value falls into the residuary estate (the catch-all clause that covers everything not specifically mentioned).

Speaking of residuary estates: this is usually the best place for general investment accounts. Rather than listing each holding, you simply leave "the rest, residue and remainder of my estate" to specified beneficiaries in specified percentages. Portfolio changes are automatically covered.

David writes his will at 30 mentioning his "Vanguard LifeStrategy Fund". At 45 he's switched to iShares. Does his will need updating? Not if it described the asset as "my investment account with Vanguard" or "my general investment account". The description needs to be functional, not specific.

The key principle: your will is instructions for executors, not a snapshot of your assets. Describe categories clearly enough that executors know what you meant, but broadly enough that normal investment activity doesn't require updates.

Inheritance Tax on Investment Portfolios: What Beneficiaries Actually Receive

Understanding the real IHT impact shows you what your beneficiaries will actually inherit.

As of the 2024/25 tax year, the nil-rate band is £325,000, frozen until 2030. Estates pay 40% tax on the excess. Transfers between spouses and civil partners are unlimited and tax-free. The residence nil-rate band adds up to £175,000 if your home passes to direct descendants, though this tapers away for estates exceeding £2 million.

Example 1: Single person, £500,000 investment portfolio, no property

Estate value: £500,000
Nil-rate band: -£325,000
Taxable amount: £175,000
IHT at 40%: £70,000
Beneficiaries receive: £430,000 (86% of portfolio)

That's a substantial tax bill that could be reduced through lifetime gifting or other planning strategies.

Example 2: Married couple, £800,000 portfolio plus £400,000 home, both pass to surviving spouse then to children

First death: £0 IHT (spousal exemption)
Second death: £1,200,000 total estate
Combined nil-rate bands: £650,000 (2 × £325,000)
Residence nil-rate band: £175,000 (home to children)
Total allowances: £825,000
Taxable: £375,000
IHT at 40%: £150,000
Children receive: £1,050,000 (87.5%)

The spousal exemption and transferable nil-rate bands significantly reduce the tax burden for married couples.

Example 3: Portfolio including AIM shares (post-April 2026)

£300,000 mainstream portfolio + £200,000 AIM shares = £500,000 total
Nil-rate band covers mainstream portfolio: £325,000
Mainstream excess: £0
AIM shares: £200,000 at effective 20% rate (50% BPR) = £40,000 IHT
Total IHT: £40,000
Beneficiaries receive: £460,000

Compare this to £70,000 IHT without the AIM holdings—the 50% relief still provides value, just not the previous 100% exemption.

Investment portfolios are valued at market value on the date of death. Volatility matters. If your portfolio drops 20% in the month you die, your IHT bill drops too. Conversely, a bull market increases the tax burden.

Timing of payment creates practical problems: IHT must be paid before probate is granted, but investments are illiquid. Executors may need to sell holdings at unfavourable prices or use other estate funds to cover the tax bill before they can access the portfolio.

This is why many investors consider lifetime gifting to reduce inheritance tax—transferring investments while alive to start the seven-year clock for IHT exemption.

Platform Beneficiaries vs Will Instructions: Which Takes Priority?

Some UK investment platforms offer beneficiary nomination features. How do these interact with your will?

Most UK platforms use nominee structures where beneficiary nominations are advisory only, not legally binding. Your will is the legal document that determines inheritance. Platform beneficiaries guide executors but don't create enforceable obligations.

The exception is rare: some platforms offer trust-based structures where beneficiaries do have legal effect. Check your platform's documentation to understand whether nominations are binding or advisory.

Best practice: align your will with platform beneficiary nominations. If your will says "ISA to my sister" but the platform nomination says "ISA to my partner", your will takes precedence—but this creates executor confusion and potential delays.

Consider Robert's situation: his will from 2018 leaves his stocks and shares ISA to his sister. His platform beneficiary nomination from 2015 names his ex-partner. The will controls—but the executors spend three months clarifying this, delaying distribution.

The risk of outdated platform beneficiaries is real. You nominated your then-partner ten years ago and forgot to update after separation. Your will protects against this if it's more recent and specific.

Action item: Check beneficiary nominations on all platforms today. Either align them with your current will or leave them blank and let your will control distribution entirely.

Pension death benefits work differently—expression of wishes forms are genuinely advisory. Pension trustees consider your wishes but aren't bound by them. Learn how pensions are treated differently from investments if you hold both.

Platform beneficiaries can be useful as backup guidance if your will is ambiguous. But they're not a substitute for clear will instructions. Treat them as helpful notes for executors, not legally binding directions.

Updating Your Will When Your Portfolio Changes

Normal investment activity doesn't require will updates. Knowing when updates are necessary prevents both update anxiety and genuine gaps in coverage.

Changes that don't require will updates:

Buying and selling individual stocks, bonds, or funds within existing accounts
Switching investment platforms (as long as account type stays the same)
Portfolio value increases or decreases
Rebalancing asset allocation
Dividend reinvestment or regular contributions

Your will describes account types and beneficiaries, not specific holdings. These changes happen automatically within those descriptions.

Changes that do require will updates:

Opening a new investment account type (adding a Junior ISA when you have a child means a new potential beneficiary)
Change of beneficiary intentions (wanting to give your ISA to a different person)
Acquiring substantial AIM holdings specifically for IHT planning (you might want these ring-fenced for a particular beneficiary)
Setting up a joint investment account with a new partner (affects right of survivorship and spousal exemption)
Moving investments into trust structures (separate legal entity requiring specialist advice)

The "residuary estate" strategy solves most concerns: if the bulk of your investments fall into "all the rest of my estate to my children in equal shares", portfolio changes are automatically covered. Only specifically bequeathed accounts need monitoring.

The general rule: review your will every five years or after major life events—marriage, divorce, birth, death, significant asset acquisition.

Small changes can be added via codicil (formal amendment), but if your investment structure has fundamentally changed, a new will may be clearer.

Maria wrote her will at 30 with a £10,000 ISA. At 45 she holds a £200,000 portfolio across three platforms with mixed beneficiary intentions. Time to review and update—not because she traded stocks, but because the overall structure and her wishes have evolved.

How to Create a Will That Protects Your Investment Portfolio

Follow these steps to create or update a will that properly protects your investment wealth.

Step 1: Inventory Your Investments

List all platforms, account types, approximate values, and current beneficiary nominations. You need the full picture before making distribution decisions. Include account numbers and access details in a secure document (not in the will itself, but referenced for executors).

Step 2: Decide on Beneficiary Allocation

Will you leave specific accounts to specific people, or pool everything in your residuary estate? Specific bequests work for major holdings ("my £200,000 AIM portfolio to my son"). Percentages work better for diversified holdings ("my investment portfolio divided equally among my three children").

Consider how to distribute your estate fairly when deciding allocation—equal division isn't always appropriate if beneficiaries have different needs.

Step 3: Consider Tax Efficiency

Can you use spousal exemption to defer IHT until the second death? Should AIM shares go to particular beneficiaries who need the IHT relief most? Would lifetime gifting reduce the taxable estate while you're alive? Tax planning isn't the only consideration, but ignoring it costs your beneficiaries money.

Step 4: Choose Executors Who Understand Investments

Financial literacy matters. Executors will need to access platforms, value holdings, and decide on sale timing. Choosing someone who understands markets prevents forced sales at market lows and protects portfolio value during administration.

Step 5: Provide Access Information

Create a secure document listing all platforms, account numbers, and two-factor authentication details. Don't include this in your will (it becomes public during probate), but tell executors where to find it. Password managers with emergency access features work well.

Step 6: Create Your Will

For straightforward estates—individual or joint accounts, ISAs, standard UK investments under £500,000—WUHLD's online service handles investment portfolios with simple, effective language. You don't need to list every holding.

For complex situations—trusts with multiple beneficiaries, business partnerships, non-UK assets, estates over £2 million—consult a specialist solicitor. These involve complex tax and trust law beyond standard will-writing.

WUHLD's service uses residuary estate language that automatically covers portfolio changes: "All my investments and financial assets to my daughter Sarah Thompson" requires no updates when you buy different stocks. The £49.99 cost compares favourably to £650+ solicitor fees for straightforward investment estates.

Create your legally valid will online with WUHLD. Our step-by-step platform ensures you properly describe your investment portfolio without needing to list every holding.

For £49.99 (versus £650+ for a solicitor), you'll get:

Your complete, legally binding UK will covering all investment accounts
A 12-page Testator Guide explaining proper execution
A Witness Guide for your witnesses
A Complete Asset Inventory document with executor guidance for accessing investment platforms## Key Takeaways

Your investment portfolio planning comes down to these essentials:

Describe investments by account type and platform in your will, not share-by-share—the residuary estate clause catches everything not specifically mentioned, automatically covering portfolio changes
ISAs lose tax-free status on death except for spouses who receive Additional Permitted Subscription allowance—but the continuing ISA still grows tax-free for up to three years during estate administration
AIM shares are losing their IHT advantages from April 2026, dropping from 100% Business Property Relief to 50%, resulting in an effective 20% tax rate instead of complete exemption
Joint accounts pass by right of survivorship, avoiding probate, but still count toward your IHT bill unless the surviving owner is your spouse or civil partner
Platform beneficiary nominations are guidance only in most UK structures—your will is the legally binding document that executors must follow

You've spent years building your investment portfolio—researching funds, rebalancing allocations, compounding returns. Don't let administrative chaos or a 40% tax bill undo that work.

A properly structured will ensures your investments reach the people you've worked so hard to provide for, with minimal tax and maximum clarity.

WUHLD's online will service handles investment portfolios of any size without needing to list every holding. For £49.99, you get a legally valid UK will that protects your stocks, bonds, ISAs, and all other assets—plus three essential guides including our executor checklist for investment accounts.

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Legal Disclaimer: This article provides general information about UK inheritance law and investment portfolio planning. It does not constitute legal advice or financial advice. For advice specific to your individual situation, please consult a qualified solicitor or financial advisor. WUHLD's online will service is suitable for straightforward UK estates; complex situations involving trusts, non-UK assets, or estates over £2 million may require professional legal advice.

Financial Advice Disclaimer: The examples provided are for illustrative purposes only and do not constitute financial advice. Inheritance tax calculations depend on your complete estate, available reliefs, and personal circumstances. For personalised tax planning, please consult a qualified financial advisor or tax specialist.

Time-Sensitive Disclaimer: This article reflects inheritance tax rules as of October 2024, including changes announced in the Autumn Budget 2024. Tax rules and reliefs are subject to change by future governments. Always verify current rules at gov.uk or consult a professional before making estate planning decisions.

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