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Investment Portfolio

Also known as: Investment Holdings, Asset Portfolio

Definition

An investment portfolio is the collection of all your financial investments—including stocks, shares, funds, ISAs, and bonds—held across one or more investment accounts or platforms.

Understanding your investment portfolio is essential for will-making, as these assets form part of your estate and must pass to beneficiaries through proper legal channels, whether via your will or direct beneficiary nominations.

What Does Investment Portfolio Mean?

An investment portfolio comprises all financial investments you own, typically spanning different asset classes like equities (stocks and shares), fixed-income securities (bonds), investment funds, and cash equivalents. Under the Inheritance Tax Act 1984, investment portfolios form part of your taxable estate regardless of whether they're held in a single platform like Hargreaves Lansdown or spread across multiple accounts. The Administration of Estates Act 1925 gives executors legal duty to collect, value, and distribute these assets according to your will's instructions.

Modern investment portfolios are predominantly digital, accessed through online platforms rather than physical share certificates. Most people hold investments across several accounts—perhaps a stocks and shares ISA with one provider, Premium Bonds with National Savings & Investments, and company shares from an employer share scheme. When Sarah dies with a £73,000 Vanguard ISA and £8,500 in Premium Bonds, her will doesn't list specific funds or bond numbers. Instead, it identifies who inherits "all my investments" or specifies which beneficiary receives which account.

Investment portfolios in wills work differently than other assets because their value fluctuates constantly. When David creates his will, his investment portfolio might be worth £248,000. Six months later, it could be £275,000 or £220,000. This volatility creates unique challenges for executors, who must value the portfolio precisely on the date of death for probate purposes, then manage it during estate administration while markets continue moving. If you specify your spouse inherits your ISA "worth approximately £125,000," the actual amount they receive depends entirely on market value when probate completes, potentially months after your death.

Tax treatment adds another layer of complexity. ISAs are free from income tax and capital gains tax during your lifetime, but they absolutely count toward your estate's inheritance tax liability. A £100,000 ISA is treated identically to £100,000 in a regular savings account when calculating whether your estate exceeds the £325,000 nil-rate band. However, certain portfolio holdings offer tax advantages—AIM shares held for at least two years currently qualify for 50% Business Property Relief (reduced from 100% in April 2026), while assets passing to spouses avoid inheritance tax entirely through spousal exemption.

Common Questions

"Do I need to list my investment portfolio in my will?" You don't need to list individual investments in your will as they're already held in named accounts. However, you should specify who inherits your investment accounts (like ISAs, brokerage accounts, or investment platforms) as part of your estate. Some accounts allow you to name beneficiaries directly, which can bypass probate.

"What happens to my ISA investments when I die?" Your ISA becomes a 'continuing ISA' when you die, maintaining its tax-free status while your estate is administered. The investments then pass to beneficiaries named in your will (or through intestacy rules if no will exists). Spouses and civil partners can inherit an additional ISA allowance equal to your ISA value at death.

"Are investment portfolios subject to inheritance tax?" Yes, investment portfolios form part of your estate and may be subject to 40% inheritance tax on amounts above the nil-rate band (£325,000). However, certain investments like AIM shares held for at least two years may qualify for Business Property Relief, reducing or eliminating inheritance tax on those specific holdings.

Common Misconceptions

Myth: ISAs are tax-free, so they're not subject to inheritance tax

Reality: While ISAs are free from income tax and capital gains tax during your lifetime, they absolutely do form part of your estate for inheritance tax purposes. A £100,000 ISA is treated exactly the same as £100,000 in a regular savings account when calculating your estate's IHT liability. The tax-free status applies to growth and withdrawals while alive, not to inheritance tax on death.

Myth: My investment account beneficiary designation overrides my will

Reality: Not all investment accounts in the UK allow beneficiary nominations. Most standard stocks and shares ISAs and brokerage accounts do NOT have beneficiary designation options—they pass through your will. Some platforms (particularly US-based ones) do offer this feature, but it's not universal in the UK. Always check your specific platform's rules and confirm in writing how your account will pass on death.

  • Stocks and Shares: Individual company shares that often form a component of broader investment portfolios.
  • ISA: A tax-advantaged wrapper for investments that becomes a 'continuing ISA' maintaining tax-free status during estate administration.
  • Premium Bonds: National Savings investment often held alongside commercial portfolios, with unique inheritance procedures through NS&I.
  • Bonds: Fixed-income securities frequently included in diversified portfolios to balance equity risk.
  • Dividends: Income generated by portfolio holdings that continues during estate administration within the continuing ISA.
  • Capital Gains Tax: Tax affecting beneficiaries who inherit portfolios, though base cost uplifts to death-date value.

Need Help with Your Will?

If you have an investment portfolio, creating a clear will ensures your investments pass to the right beneficiaries without confusion. Whether you hold a simple ISA or complex holdings across multiple platforms, your will should specify who inherits each account.

Create your will with confidence using WUHLD's guided platform. For just £99.99, you'll get your complete, legally binding will plus three expert guides. Preview your will free before paying anything—no credit card required.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.