Administration: Dealing With The Estate Flashcards
What is the test for devastavit claim ?
Whether there has been a loss caused by breach. (Not whether PR is culpable)
Is there protection for PRs who that know there is a person with a claim they cannot find them ?
- keep assets in case they appear
- taking indemnity against beneficiaries
How can PRs protect themselves from liability ?
By waiting 6 months before distributing the estate
What should be paid first after receiving monies from deceased ?
The funeral costs and any outstanding debts
What is included in testamentary expenses will include:
- cost of obtaining the grant
- cost of collecting and preserving deceased assets
- cost of administrating deceased estate
- any inheritance tax on death
What is section 35 regarding beneficiaries taking assets subject to debts ?
If there is an express contradiction to gift being subject to the debt then it will be paid out of residue.
When are pecuniary legacies due to be paid ?
General rule is one year after death, but there are exceptions requiring it to be paid at date of death
What are the exceptions that require pecuniary legacies to be paid at the date of death ?
- payment of debt owed by testator to creditor
- charge on land owed by the testator
- payable to testators minor child
- payable to a minor where the intention is to provide for the maintenance of minor
What CGT is payable on death ?
None it is only payable when PRs sell assets
When is the value judged from for CGT in Disposal of assets ?
From the date of death to the date of sale.
What is the rate of CGT ?
20% on gains and 28% on residential property
If PRs transfer assets to beneficiaries is CGT chargeable ?
No as they have not made a disposal yet - the Beneficiaries acquire the asset at market value at date of death
What makes an estate considered complex ?
Exceeds 2.5M value
or
tax due on whole administrative period exceeds £10k
or
Value of assets sold in a tax year exceeds 500k
What are the rules surrounding annual exemption for CGT available to PRs ?
Can use the annual exemption for tax year after death + two years after that only
After expenses are paid out of assets if there is multiple creditors what is the rule in distributing the remains between them ?
It will not be done in order of the debt arising but rather in proportion to the debt owed
