INFORMATION TO FACILITATE CLIENTS’ QUERIES ON TRANSFER (‘CAUSA MORTIS’) OF MALTA GOVERNMENT STOCKS (MGSs)
Transfer (‘Causa Mortis’), in simple terms, is a device by which an heir is entitled, on production of evidence, to acquire a movable and/or immovable property on the death of a person
A STEP-BY-STEP GUIDE
These guidelines are intended to set out the procedures to be followed by the heirs of a deceased stockholder for the transmission/transfer (‘causa mortis’)of Malta Government Stocks (MGSs).
1. How to claim
The Debt Management Directorate within the Treasury processes ‘causa mortis’ claims of demised holders of Malta Government Stocks (MGSs). This Office recognises and accepts only claims received from a notary public or a lawyer who shall be appointed by the heirs to process the claim on their behalf. An acknowledgement is sent to the notary public/lawyer on receipt of a claim.
2. Confirmation of Holdings of the deceased
After a ‘causa mortis’ claim is received from the heirs’ notary public/lawyer, Treasury obtains from the Malta Stock Exchange (MSE) a confirmation of:
MGS holdings registered solely in name of the deceased and/or jointly held with other persons, and
MGS holdings held in the name of other persons but from which the deceased enjoyed the right of usufruct.
Until the finalization of transmission/transfer of securities, the MSE accounts in respect of the above-mentioned holdings are blocked by the Central Securities Depository (CSD) and no trading in these MGSs will be allowed.
3. Which documents are required?
The ‘causa morits’ claim submitted by the notary public/lawyer must be accompanied by the following documents duly stamped and certified in ink by the notary public/lawyer for their authentication:
full particulars of the deceased including, name, surname, I.D. card number, marital status and permanent address before death;
a declaration by a qualified person (namely a minister of religion, or a notary public or a lawyer) certifying that he/she has known the members of the family of the deceased. This list shall include full names, I.D. card numbers and addresses of survivors/heirs, usufructuaries and legatees;
the Public Registry Testamentary Research Certificate and the Court Testamentary Research Certificate issued by the Public Registry and The Second Hall of the Civil Court respectively, confirming (or otherwise) the existence of wills made by the deceased;
copy of relevant will/s (if any);
a legal copy of the Court Decree confirming the Opening of Succession by the Second Hall of the Civil Court in the case the deceased died intestate;
a clear statement by the notary public/ lawyer confirming:
(i) the person/s and respective amounts to whom the MGSs are going to be devolved; and
(ii) whether the MGSs are going to be transferred/registered in the name of the heirs or sold.
4. Divisibility of MGS
Malta Government Stocks issued after the 1st of January 2008 are divisible in multiples of Euro 100 whereas securities issued before such date, are divisible in multiples of Euro 1.
Nevertheless, the minimum amount of MGSs that can be transmitted to heirs irrespective of the date in which they were issued, shall not be less than €100.
5. When is a private agreement required?
The heirs are required to enter into a private agreement before a notary public when:
(i) the MGS holdings could not be divided up exactly in accordance with the provisions of the last will of the
deceased on account of the divisibility and minimum allotment constraint mentioned at paragraph 4
(ii) all the heirs agree to divert from the provisions of the will or rules of intestacy.
Such private agreement duly endorsed by all the heirs and the Notary is to be submitted to Treasury together with other “causa mortis” documentation.
6. Selling the inherited MGSs
If it is the wish of the heirs to liquidate (sell) the MGSs, an appointed person by heirs shall be granted a Power (s) of Attorney or a mandate through a Private Agreement to deal with authorised financial intermediaries to sell the inherited MGS on their behalf.
The Power of Attorney granted to Maltese residents should be attested to by a notary public or lawyer. The Power of Attorney granted to a non-resident heir should be attested to by a notary public of the country of residence, by a Malta Consular Official or by a Bank Official of a well-known bank.
On the strength of such Power of Attorney or Private Agreement to this effect, the Treasury issues a permit authorising the MSE to unblock the relevant MSE accounts and allow the sale of MGSs by the appointed person. A copy of such permit is copied to the notary public/lawyer of the heirs.
The sale of MGSs shall be made by the appointed person through an authorised financial intermediary against presentation of the Power of Attorney or Private Agreement and the Permit issued by the Treasury. All the proceeds from the sale of MGSs are received by the appointed person.
MGSs issued after 1st January 2008 are traded at the Malta Stock Exchange in units of 100 whereas those issued prior to the above date may be traded in odd lots subject to a minimum amount of 100 units.
7. Keeping the inherited MGSs
In accordance with the ‘causa mortis’ claim submitted by the notary public/lawyer, the heirs may choose to keep the inherited MGSs and have them transferred in their name in terms of the instructions given to the notary public/lawyer. In such case:
A fee of €6.50 is payable on demand for each transfer in each security;
a form is sent to the notary public/lawyer comprising:
(i) the tax election by the heirs confirming their preference towards the receipt of their future interest payments,
(either net of the 15% final withholding tax (FWT) or gross; and
(ii) direct credit instructions confirming the bank and bank account number in which future payments of interest
should be credited (deposited);
On receipt of payment for transfer fees, the tax election/direct credit form is processed to the CSD so that transfer of holdings can be effected by the Malta Stock Exchange. When such transfer is effected, the MSE issues a Registration Advice to the new stockholders confirming that the inherited MGSs have now been registered in the heir’s name.
8. What happens to the interest payments and/or capital repayments (if any) which were issued between the date of death of the stockholder and the finalisation of the ‘causa mortis’ claim?
Upon notification of a death of a stockholder, the MSE blocks the accounts of the deceased:
Any interest or capital repayments arising from such accounts will be held at Treasury in a suspense account called ‘below-the-line account’ until the finalisation of transfer of holdings from the deceased onto heirs through the ‘causa mortis’ claim.
Once the ‘causa mortis’ claim has been finalised any amounts that were previously withheld at the Treasury pending finalisation of the ‘causa mortis’ claim, will be paid to the heirs by cheque in accordance with the instructions given by the notary public/lawyer.
No additional interest is paid on any such amounts withheld by Treasury.