For many shareholders outside the UK, owning UK-based certificated shares was once considered straightforward. Investors, whether purchasing in good faith or inheriting shares, assumed they could sell when needed. However, a growing issue has emerged: non-UK residents are increasingly unable to sell their UK shares without navigating an expensive and complex process.
Historically, a handful of brokers could facilitate the direct sale of these shares. Today, most decline outright unless the shareholder engages a solicitor regulated by the Financial Conduct Authority (FCA) to manage the process. This raises serious questions about the fairness of the system and whether the focus has shifted from shareholder service to unnecessary revenue generation.
The practical impact is stark. A shareholder may now need to pay fees to at least three separate parties: the solicitor, the broker, and the share registry. Administration costs quickly mount, often leaving shareholders with very little of the actual value of their shares after the sale. In some cases, shareholders holding low-value shares end up losing money rather than realizing any benefit.
Proponents of these restrictions argue that they are necessary for fraud protection. But if a shareholder has already proven ownership and provided all certified documentation required, the rationale becomes less convincing. Why should demonstrating compliance not be sufficient to sell shares?
The scale of this issue is significant. In the UK alone, approximately 4.7 million people still hold certificated (paper) shares, equivalent to roughly 9% of UK adults who invest directly (Euroclear, 2025). Estimates suggest that up to 8–10 million certificated holdings remain on UK registers, though some may be inactive (Computershare, 2023).
Globally, while most major markets have transitioned to electronic or book-entry systems, significant numbers of paper certificates still exist in some countries, meaning millions of shareholders worldwide could be affected by similar barriers.
A critical consideration is residency. There is no authoritative public data on how many of the 4.7 million certificated shareholders in the UK reside abroad, but we know that overseas investors hold a substantial portion of UK share ownership by value. According to the UK Office for National Statistics, over 58% of UK quoted share value is held by overseas investors (ONS, 2024). While this statistic refers to electronic markets rather than paper certificates, it illustrates that non-UK residents are a significant and relevant group affected by these restrictions.
The result is a dilemma for international shareholders. They can either abandon their shares entirely—effectively writing off their investment—or pay exorbitant fees that often consume the value of the holdings themselves. This not only feels unfair but actively penalizes shareholders for circumstances beyond their control, such as residency.
Ultimately, this situation highlights a fundamental tension in modern share trading: balancing legitimate fraud protection with equitable treatment of investors. As the landscape stands, non-UK shareholders are left with limited options, high costs, and little recourse, calling into question why such shares are sold to international investors in the first place if they cannot be accessed freely.
Until practical solutions are implemented, this policy risks alienating investors and undermining confidence in UK shares for non-residents—a serious consequence for both the market and individual shareholders.
Sources:
- Euroclear. Euroclear and Thinks Insights: Strategy Press Release, 2025.
- Computershare. Digitisation of Shareholdings Discussion Paper, 2023.
- UK Office for National Statistics. Ownership of UK Quoted Shares, 2024
This article was submitted by Share Data as part of an advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.
