Chapter 5

Question 1

What are the duties of the executor

Answer 1

Administer the estate
Determine the assets and liabilities of the estate

Obtain probate

Collect any debts
Complete an inheritance tax account for HMRC
Pay any tax

Distribute the assets in accordance with the will

Question 2

What do the executors have to do to obtain the grant of probate

Answer 2

They have to prove the will in the probate registry

This enables them to administer the estate

Question 3

Does the inheritance tax do you have to be paid before or after the grant of probate can be issued to the executors?

Answer 3

Before

Question 4

What happens if the executor has died I was on willing or unable to act?

Answer 4

Administrators are appointed by the probate registry

Question 5

What is a mutual will

Answer 5

There is a mutual arrangement to not revoke the Will without the consent of the other so post death the remaining spouse as will cannot be altered

If the remaining spouse goes on to change there will after the first death a constructive trust will arise at that time on the basis that it would be fraudulent to revoke a will when written on a mutual basis

Question 6

What happens in intestacy rules

Answer 6

Spouse or civil partner – takes everything

Spouse and issue – spouse takes chattels and 250,000 and half of the residue Children will take the remaining half interest if under 18

No spouse – everything is taken by issue if non-grandchildren step in to choose of parents if non-parents if non-brothers sisters if non-grandparents if none on Aunts uncles

Question 7

Where part of the deceased’s estate Who died intestate passes to a minor what is created

Answer 7

A statutory trusts created this is governed by legislation and therefore there is no express trust paperwork in existence

Question 8

Who can agree and executed deed of variation

Answer 8

The beneficiaries provided they are all aged 18 or over and of sound mind

The deed must refer to the will or intestacy being varied and signed by all those that would have benefited

Be within two years of death

Say that the variation is to have the effect of IHT as if the deceased had made it

Signed by all the person is making a variation

Must be no consideration in money or money’s worth

Question 9

Who is deemed to have made the transfer of value when I did variation is effected

Answer 9

The deceased provided the deed of variation contains a statement to say this

Question 10

What is the tax situation on A deed of variation if a person bequeathed in favour of their infant son

Answer 10

It’s treated as if it had come from the deceased estate for hit

For income tax purposes the transfer will be treated as the parents gift and will be taxed at the parents rate of income tax if over £100

Question 11

What happens when someone disclaims there inheritance under a will

Answer 11

They give it back to the deceased estate and it gets divided up amongst the other beneficiaries they don’t have a choice in who received the funds

Question 12

How can a person revoke their will?

Answer 12

I deliberately destroying it

By making a new will

Marriage

You must have mental capacity to revoke are well if you appoint a spouse is an executor on divorce this was cancelled
Divorce cancer was any benefit under a will
It is advisable to make a new will on marriage or divorce

Question 13

Does marriage or registering a civil partnership revoke a will

Answer 13

Yes

Question 14

Under what grounds can people challenge A will

Answer 14

By application to the court for a reasonable financial provision from the estate under the inheritance provision for family and dependence act 1975

Question 15

What makes are will valid

Answer 15

It must be written in form

Signed by the person making a will

Made by someone who is aged 18 or over

Must be of sound mind and Under no pressure

Must be signed and witnessed by two independent people
It is good practice for the will to be dated

Question 16

What are the personal representatives responsible for paying?

Answer 16

Any income tax debts

Up to the date of death they can use all allowances and reliefs, tax on any income received after the death they can claim no personal allowances and will income is taxed at the basic rate 10% dividends 20% savings 20% other

Question 17

Mary died on 28 February 2015 what level of personal allowance can have personal representatives claim back against income received by her estate during tax year 15/16

Answer 17

None as this is the tax year after her death

Question 18

What percentage of capital gains tax do the personal representatives have to make during the administration period of an estate

Answer 18

They’re liable to capital gains tax at 28% on disposal is made by the estate during the administration period

Question 19

How long after death is the estate entitled to the individual annual exemption of capital gains

Answer 19

They are entitled to the exemptions in the tax year of death and the following two tax years

Question 20

How long do the personal representatives have to carry back any capital losses that arose in the tax year in which the person died up to the date of death

Answer 20

They can claim back for the three preceding tax years allocating the loss against the gains of the latter year first this could enable a refund of capital gains tax to be claimed

Question 21

If somebody leaves at least 10% of the net estate ( after relieves and exemptions) is donated to charity how much will the I H T rate reduced to?

Answer 21

It will reduced from 40% to 36%

Question 22

What do you executors need to prove their title

Answer 22

A grant of probate

Question 23

List five duties of an executor

Answer 23

Determining the assets and liabilities of the estate

Obtaining probate

Collecting the assets of the estate and paying the debts of the deceased

Setting any tax liabilities income and capital gains tax

Completing the necessary accounts

Distributing assets in accordance with the will