Yes, you can substitute a lower value and reclaim IHT if an asset is subsequently sold below Probate Value. The time limit is one year after death for shares but up to 4 years for property.

http://www.gdlaw.co.uk/n...ng-asset-values-part-ii

"If a property is sold within 4 years of date of death at less than probate value, then the executors can apply to substitute the sale price for the probate value and to recover inheritance tax which was paid on the difference.

In the case of shares, the deadline is one year from the date of death and so executors must be sure to act with reasonable speed if they wish to take advantage of this relief. "



If an asset is subsequently sold for a price above Probate Value, Capital Gains Tax rules apply on the difference between the net sale price and Probate Value.

I, too, am not completely sure of the current position but I certainly knew about the old one; my father died on 10 October 1987! (For those too young to remember, Black Monday (19 October 1987) saw the greatest ever one-day fall in the markets). I was able to use this exemption to the full.

I don't think there is any real substitute for asking various platforms/brokers what they do in cases of death and what charges they levy, and comparing the pros and cons of each one.
Of course there may be benefits and disadvantages which in your mind override their answers : for example, if all deals are at a flat £3.50 and you do a lot of dealing, this may take precedence in your mind over the fact that that particular broker charges an extra £5 per holding to deal with probate valuations.

As for automated buys and sells (Stop loss, trailing stop, stop buy, etc), they are fine in theory, but it is all too easy to get caught by one market-maker putting a higher or lower price than you would expect for a minute or two in order to flush out such buyers or sellers. It's an easy profit for them, and a loss-making irritation for the client. I used to do stop-loss and trailing-stop deals, but these days just put the odd bid in at very much less than the market, in case there is an overnight collapse in the share price down to a level that I think is worth buying at : typically this will be 25%+ below the current price, which means that normally the deal will never be done, but if I do catch one there is scope for a big increase when the problem is resolved and brings the company back to its current share price (but I try to place such deals only for what I consider very high quality companies, or for well-run investment trusts where I think the market is temporarily too high).

As for picking a % margin for a stop loss sale, it is going to depend on 2 factors : (a) your own comfort zone, (b) the normal volatility range of that particular holding - a small mining company can be expected to vary in price considerably more than a large utility company without anything being particularly amiss, for example.

If you don't want to watch prices all the times, perhaps you should consider only using managed investments rather than individual shares. Because of the diverse range of holdings in an OEIC, unit trust or investment trust, they should not vary much in price from day to day, and there should be no need to think about stop losses at all. Simply watching the FTSE 350 index (or equivalent foreign one where relevant) should give you a reasonable guide as to what is happening to your fund.

Adding to TrevS's comment:
Always think it through before acting, and get specialist advice before acting. Even think about what you want to happen before the executors get to the point of transferring the assets to the beneficiaries. For example, if it suits all beneficiaries for the will to be rewritten after the death of the testator, this can be done WITHIN TWO YEARS from the date of death by using a Deed of Variation.
In matters of estates, wills and inheritance, the people to consult are members of STEPS. It will not be cheap, but it should be good.

One of the most difficult and unpredictable things about share prices and market reactions is that after a period of apparent stability, one company statement or event can unleash a major change in share price that nobody can catch, even sometimes with an automatic stop loss.

Take for example the infamous comment by Gerald Ratner when describing (or 'blurting out the truth about') the quality of the jewellery sold by his chain.
The share price reaction was sudden and previously unexpected. The price was marked down savagely, and for the individual investor the loss was sudden and in practice unavoidable.
What actually happens when something like this (a sort of 'Black Swan') comes?
The market-maker hears the news, probably before the market opens, and thinks "Oh my God! This is going to result in a massive unloading of stocks, and I don't really want to buy them at all!!
What does he do? He marks down his bid price to below what he thinks is the worst-case price scenario, and probably reduces the offer price by less.
Result : panic sellers meet suddenly dropped prices.
If your stop loss was 6% and the market-makers as a whole drop their prices at the opening of business by 20%, your stop loss gets triggered, but at 20% below the previous day's price. There is no move from 0% drop to 1% drop to 2% drop, etc, with each stop loss being triggered at 1%, 2%, etc. It's 0% the day before to 20% today at start of dealing. WHAM!
This is why stop losses can be dangerous. You might have calculated (OK 'had a hunch'!) that at 15% down, the stock would be a buy, but suddenly you're taken out at 20% down. Do you now buy back quickly, hoping that a recovery will occur due to over-reaction to bad news? Will you then buy into a 'dead-cat-bounce?' with the price then falling away again to 25% down?

One of the few reasonably good bits of advice is: If there is a profit warning, sell, because usually 1 or 2 more will follow before stability returns (if ever).

On your CGT query:
All assets subject to CGT are counted in the tax year of sale (Valid tax point = date of contract falling within the tax year, even if settlement drifts a day or two into the next tax year).
There are separate sections of the tax return for gains realised on (a) Quoted companies, (b) Unquoted companies, (c) Other, e.g. gold bullion, land, 2nd house, etc. but they all get aggregated in the final calculation.
All losses on those 3 sections incurred in that tax year are also listed.
If the gains less the losses exceed the annual exempt amount, the excess is taxable to CGT at the relevant rate (min 18%, otherwise 28%, more in certain cases).
If losses exceed gains, the net loss can be carried forward indefinitely, as long as you have declared them on the tax return.
If you have chargeable gains but also some some losses from earlier years, you can (if you wish) bring forward sufficient losses to set against the gains until you have brought the chargeable gain down to the exempt amount - no point in using up more!
You can't carry forward gains to later years : what you've sold in a tax year creates a chargeable gain for that tax year.

This is only a condensed summary of an extremely complex situation : please read the HMRC guidance notes for fuller details, and be prepared to use a qualified accountant if unsure of what to declare in what form in which section of the tax return.