LEGAL
Surrey’s Premier Lifestyle Magazine
Estate administration – do you need help?
Hannah Green and Julie Man of Mundays LLP look at how you can benefit from seeking support in administering an Estate following the death of someone close to you.
The process
Following a death it is the responsibility of the Executors under the deceased’s Will (or an Administrator if someone dies without leaving a Will) to administer the estate of the person who has passed away. For the sake of this article, we will refer to Executors.
In broad terms this includes:
• Finding out the value of the assets and liabilities as at the date of death, this extends to lifetime gifts, trusts, business and foreign assets;
• Completing the relevant inheritance tax account and paying inheritance tax (where appropriate);
• Obtaining a Grant of Probate (or Letters of Administration if there is no Will);
• Collecting in the assets and settling any liabilities;
• Finalising the deceased’s tax affairs by reporting to HMRC concerning Income and Capital Gains Tax; and
• Distributing the estate following the wishes set out in the Will.
This can be a complex, time consuming minefield and a worrying prospect for a family often struggling with the loss of someone in their family.
Following a death it is the responsibility of the Executors under the deceased’s Will (or an Administrator if someone dies without leaving a Will) to administer the estate of the person who has passed away. For the sake of this article, we will refer to Executors.
In broad terms this includes:
• Finding out the value of the assets and liabilities as at the date of death, this extends to lifetime gifts, trusts, business and foreign assets;
• Completing the relevant inheritance tax account and paying inheritance tax (where appropriate);
• Obtaining a Grant of Probate (or Letters of Administration if there is no Will);
• Collecting in the assets and settling any liabilities;
• Finalising the deceased’s tax affairs by reporting to HMRC concerning Income and Capital Gains Tax; and
• Distributing the estate following the wishes set out in the Will.
This can be a complex, time consuming minefield and a worrying prospect for a family often struggling with the loss of someone in their family.
Julie Man is head of Mundays’ Private Wealth team with a breadth of private client expertise including complex Wills, lifetime capital tax-planning, Business Property Relief and ancillary advice on succession planning for business owners, domicile and cross-border issues for international clients, private and charitable trusts together with the administration of estates.
Contact Julie Man of Mundays LLP on 01932 590643 or by email at julie.man@mundays.co.uk
Inheritance tax account
The date of death values of the assets and liabilities of the deceased must be entered into the relevant inheritance tax account. Depending on the complexity and value of the estate, the short account maybe appropriate or the more cumbersome detailed long account, where the estate meets certain criteria or there is inheritance tax payable.
The inheritance account is one part of the application. This together with the original Will and statement of truth forms the full application. The Grant of Probate is the legal document issued by an arm of the Court confirming that the Executors have the legal authority to deal with the deceased’s estate.
The inheritance account is submitted to HMRC for its thorough review. Sometimes HMRC may take a closer look at some parts of the estate such as referring to specialist departments like the District Valuer’s office. The District Valuer’s office is often involved when considering property valuations. This can result in negotiations if they believe the property has been undervalued.
The date of death values of the assets and liabilities of the deceased must be entered into the relevant inheritance tax account. Depending on the complexity and value of the estate, the short account maybe appropriate or the more cumbersome detailed long account, where the estate meets certain criteria or there is inheritance tax payable.
The inheritance account is one part of the application. This together with the original Will and statement of truth forms the full application. The Grant of Probate is the legal document issued by an arm of the Court confirming that the Executors have the legal authority to deal with the deceased’s estate.
The inheritance account is submitted to HMRC for its thorough review. Sometimes HMRC may take a closer look at some parts of the estate such as referring to specialist departments like the District Valuer’s office. The District Valuer’s office is often involved when considering property valuations. This can result in negotiations if they believe the property has been undervalued.
Hannah Green is an Associate Probate & Trusts Manager in Mundays’ Private Wealth team with over 13 years experience in a breadth of Private Wealth matters. She particularly specialises in Trust and Estate Administration. Clients frequently compliment her on her compassionate and professional approach when supporting families through the estate administration process.
Contact Hannah Green of Mundays LLP on 01932 590653 or by email at hannah.green@mundays.co.ukPenalties
The more detailed account in most cases ranges from being 30 to 50 pages long.
It is imperative that the Executors make full enquiries into the deceased’s finances so that they can be satisfied the information provided to HMRC is accurate.
Penalties may be applied by HMRC if the account is submitted late, these can be up to £3,200 and significantly higher if HMRC feels any information provided is deliberately inaccurate.
Why seek professional support for Estate Administration?
It can be invaluable instructing a lawyer to assist with alleviating this administrative burden at what is a difficult time for the following reasons:
• They specialise in this complex area of law and deal with these accounts day to day;
• Their familiarity with HMRC’s best practice concerning the completion of the inheritance tax accounts;
• Guidance concerning inheritance tax payment;
• Advice about inheritance tax reliefs and exemptions, e.g. Business Property Relief, Lifetime Gifts;
• The benefits of varying a person’s Will through Deeds of Variation; and
• They can use their knowledge and experience of dealing with HMRC to negotiate on your behalf with HMRC and the District Valuer to minimise inheritance tax in the estate so that as much of the estate passes to the family as possible.
This is not an exhaustive list, but gives you an idea of the expertise and guidance Mundays can offer in navigating this tricky area.
The more detailed account in most cases ranges from being 30 to 50 pages long.
It is imperative that the Executors make full enquiries into the deceased’s finances so that they can be satisfied the information provided to HMRC is accurate.
Penalties may be applied by HMRC if the account is submitted late, these can be up to £3,200 and significantly higher if HMRC feels any information provided is deliberately inaccurate.
Why seek professional support for Estate Administration?
It can be invaluable instructing a lawyer to assist with alleviating this administrative burden at what is a difficult time for the following reasons:
• They specialise in this complex area of law and deal with these accounts day to day;
• Their familiarity with HMRC’s best practice concerning the completion of the inheritance tax accounts;
• Guidance concerning inheritance tax payment;
• Advice about inheritance tax reliefs and exemptions, e.g. Business Property Relief, Lifetime Gifts;
• The benefits of varying a person’s Will through Deeds of Variation; and
• They can use their knowledge and experience of dealing with HMRC to negotiate on your behalf with HMRC and the District Valuer to minimise inheritance tax in the estate so that as much of the estate passes to the family as possible.
This is not an exhaustive list, but gives you an idea of the expertise and guidance Mundays can offer in navigating this tricky area.
essence info
Mundays LLP400 Dashwood Lang Road, Weybridge, Surrey KT15 2HJ
Telephone: 01932 590500
Website: www.mundays.co.uk
The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.