Obtaining Grant of Representation Flashcards
what is the effect of GOR?
- GOR proves PR has title to D’s assets to sell them, pay liabilities etc
what are the preliminary steps?
Step 1 – check the validity of the will
Step 2 – the beneficiaries
Step 3 – assessing the estate
explain ‘Step 1 – check the validity of the will’
A solicitor must check that it:
o Is the last will of T;
o Has not been validly revoked;
o Is executed in accordance with s9 WA 1837; and
o It includes an attestation clause
what will happen if the will is not valid?
- If the will is not valid, GLA will need to be applied for and not GOP
explain ‘Step 2 – the beneficiaries’
A solicitor must:
o Consider entitlement of Bs i.e. under the will (have any gifts failed?) and IR
o GDPR requirements inform Bs that they are holding their data, the purpose it is being used and their rights as data subjects
what information must the PRs give a solicitor and why?
PRs must provide the solicitor with details of any assets and liabilities
o Property which does not pass under the will or IR is irrelevant
Assets will be valued to determine the size of the estate and IHT liability
what property can be dealt with without a grant?
o Court order > the court can order a payment be made to B (see: limitations)
o Physical cash
o Chattels i.e. any moveable property
- If the estate only consists of these assets, they need not obtain a GOR
when the court can make an order for payment to be made to Bs without GOR, how is this limited?
The payment cannot exceed £5k.
The institution can refuse, meaning the PR will need GOR.
Only relevant to the following:
* Money in National Savings Bank, Trustee Savings Bank, building societies or friendly societies (no other accounts)
* National savings certificates and premium bonds
re: excepted estate
explain the position regarding the IHT400 with excepted and non-excepted states
- If it is an excepted estate no IHT400 necessary
- Is not an excepted estate IHT400 is necessary
re: excepted estate
to what deaths do these rules apply?
- This applies to deaths on or after 1 Jan 2022
re: excepted estate
what is important to remember when determining whether an estate is excepted?
- NRB = currently £325k, however this can be increase if a spouse/CP inherits some/all of their NRB
re: excepted estate
what are the categories of excepted estate?
- small estate
- exempt estate
- non-domiciled estate
re: excepted estate
what is a specified transfer?
give an example
- Specified transfer = chargeable transfer of cash, chattels, tangible moveable property, quoted shares or security, interest in land (unless it is subject to trust) made 7 years before death
o i.e. if someone transfers unquoted shares 7 years before death, the estate will not be excepted
re: excepted estate
what is a specified exempt transfer?
transfers of value years prior to death which are exempt:
o Transfers between spouses/CPs
o Gifts to charities
o Gifts to political parties
o Gifts to housing associations
o Maintenance funds for historic buildings etc
o Employee trusts
re: excepted estate
what are the requirements for a small estate?
Requirement for a small excepted estate:
o D must have been domiciled in the UK
o The estate (which consists of property passing under will, intestacy, nomination or survivorship) does not consist of more than:
£250k in settled property (i.e. property held on trust); and
£100k in property represented outside of the UK
o D made no chargeable transfers in the 7 years before their death, other than specified transfers where the aggregate value (ignoring business and property relief) which does not exceed £250k, and
o The aggregate of the following does not exceed their NRB:
The gross value of the estate, plus
The value of any specified transfers, plus
The value of any specified exempt transfers
re: excepted estate (small estate)
what is the cap on the estate value?
The estate (which consists of property passing under will, intestacy, nomination or survivorship) does not consist of more than:
£250k in settled property (i.e. property held on trust); and
£100k in property represented outside of the UK
re: excepted estate
what items are aggregated?
The aggregate of the following does not exceed their NRB:
The gross value of the estate, plus
The value of any specified transfers, plus
The value of any specified exempt transfers
re: excepted estate
what is the decision tree for small estates?
If the answer is no the all of the below, it is an excepted estate:
1. Did D live outside the UK? NO
2. Does the estate have more than £250k trust property? NO
3. Does the estate have more than £100k outside the UK? NO
4. Has D made any lifetime transfers? NO
5. Has D made specified transfers with an aggregate value of over £250k? NO
6. Does the aggregate gross value, specified transfers and exempt transfers exceed the NRB? NO
re: excepted estates
what are the requirements for an exempt estate?
Requirements for an exempt estate:
o D must have been domiciled in the UK
o The estate (which consists of property passing under will, intestacy, nomination or survivorship) does not consist of more than:
£1m total amount of trust property (inc. exempt amounts);
Of that, not more than £250k of chargeable trust property; and
£100k in property represented outside of the UK
o D made no chargeable transfers in the 7 years before their death, other than specified transfers where the aggregate value (ignoring business and property relief) which does not exceed £250k, and
o The aggregate of the following does not exceed £3m:
The gross value of the estate, plus
The value of any specified transfers, plus
The value of any specified exempt transfers
o Where there is property passing to a charity/spouse/CP after deduction of liabilities, the aggregate of the following does not exceed their NRB (which may have been increase:
The net value of the estate, plus
The value of any specified transfers, plus
The value of any specified exempt transfers
re: excepted estates - exempt estate
what is the estate value cap?
The estate (which consists of property passing under will, intestacy, nomination or survivorship) does not consist of more than:
£1m total amount of trust property (inc. exempt amounts);
Of that, not more than £250k of chargeable trust property; and
£100k in property represented outside of the UK
re: excepted estates - exempt estates
what items are aggregated?
The aggregate of the following does not exceed £3m:
The gross value of the estate, plus
The value of any specified transfers, plus
The value of any specified exempt transfers
re: excepted estates - exempt estates
what is the position where property is passing to a spouse/CP?
Where there is property passing to a charity/spouse/CP after deduction of liabilities, the aggregate of the following does not exceed their NRB (which may have been increase:
The net value of the estate, plus
The value of any specified transfers, plus
The value of any specified exempt transfers
re: excepted estates
- exempt estates
what is the decision tree?
If the answer is no the all of the below, it is an exempt estate:
1. Did D live outside the UK? NO
2. Does the estate have more than £1m trust property? NO
3. Does the estate have more than £250k chargeable trust property? NO
4. Does the estate have more than £100k outside the UK? NO
5. Has D made any lifetime transfers? NO
6. Has D made specified transfers with an aggregate value of over £250k? NO
7. Does the aggregate gross value, specified transfers and exempt transfers exceed £3m? NO
8. Where property is passing to a spouse/CP/charity, does the aggregate net value, specified transfers and exempt transfers exceed their NRB? NO
re: excepted estates
explain category 3
non-domiciled estates:
D was never domiciled in the UK and owner limited assets in the UK
re: paying IHT
when is this stage relevant?
- This stage is only relevant if IHT is payable before GOR can be obtained
re: paying IHT
when does IHT not need to be paid pre-GOR?
if the estate is excepted
re: paying IHT
if IHT is payable, what must the PRs do before applying for GOR?
- If IHT is payable, before submitting IHT400, a reference number will need to be applied for using schedule IHT422
These documents will then need to be sent to HMRC:
o IHT400 (or IHT401 for those domiciled outside the UK);
o Relevant schedules i.e. schedule 403 for any lifetime transfers
re: paying IHT
what is form IHT400?
- IHT400 is an inventory of D’s assets and liabilities. It is used to claim tax relief and calculating IHT payable.
re: paying IHT
when must IHT400 be completed?
- IHT400 should be completed within 12 months of the end of the month in which D died (usually done within 6 to comply with IHT time limits on interest)
re: paying IHT
once IHT400 has been completed, when can GOR be applied for?
- Must wait 20 days from sending IHT400 until applying for GOR, otherwise the application will be blocked
re: paying IHT
what is the timescale for paying IHT? what is the consequence of late payment?
IHT is due at the end of the 6 month following D’s death and before obtaining GOR i.e. DOD 10 Jan, IHT payable by 31 July. Late payments attract interest.
The 1st payment on the instalment option, IHT on a PET and any additional IHT on an LCT need to be paid within 6 months, but not before GOR
re: paying IHT
what is the timescale for the 1st payment on the instalment option?
The 1st payment on the instalment option, IHT on a PET and any additional IHT on an LCT need to be paid within 6 months, but not before GOR
re: paying IHT - instalment option
how many payments are there?
- 10 yearly payments 1st payment due is due at the end of the 6 month following D’s death, the remaining 9 payments are made yearly after that
re: paying IHT - instalment option
how is the amount payable apportioned?
- IHT payable is apportioned using the estate rate
re: paying IHT - instalment option
when is this available?
The above is in relation to IHT payable by PRs on the death estate.
* The instalment option is also available to the donee of a PET and where there is additional IHT on an LCT if:
o The person benefitting from the transfer is paying the IHT; and
o They retained ownership from the date of transfer from DOD
- Only available on certain types of property, i.e.:
o Land of any description (inc. properties)
o Business or an interest or a business
o Quoted or unquoted shares which gave D control of the company immediate before death
o Unquoted shares which do not give control, if either:
They are at least worth £20k and 10% of the company’s holding;
HMRC is satisfied IHT cannot be paid in one sum without hardship;
IHT on all instalment property amounts to at least 20% of the total IHT
re: paying IHT - instalment option
what is the position regarding interest?
- Interest on land interest is payable on the amount of IHT outstanding from the previous year (i.e. £10k IHT. 2020 £1k paid. Interest on £9k added to ‘21)
- All other property interest is only added if payment is late
re: paying IHT - instalment option
what happens if the property subject to the instalment option is sold?
- If the instalment property is sold, all IHT and interest is immediately payable
re: paying IHT - instalment option
is the instalment option available for lifetime transfers?
The above is in relation to IHT payable by PRs on the death estate.
The instalment option is also available to the donee of a PET and where there is additional IHT on an LCT if:
o The person benefitting from the transfer is paying the IHT; and
o They retained ownership from the date of transfer from DOD
re: paying IHT
what are the funding options?
- Direct payment scheme
- Life assurance
- Assets realisable without GOR
- Loans from Bs
- Bank
- National Savings Bank Accounts and proceeds from National Savings Certifications / Government stock
- Heritage property in lieu of tax
- Grant on credit
re: paying IHT
explain life assurance
if payable to the estate, they may agree to pay HMRC direct
re: paying IHT
explain direct payment scheme
some banks, pension and life assurance and brokers will agree to pay IHT direct from D’s account (not a quick process). PRs need to send the bank ID information and Form IHT423 for each bank transferring money with IHT400 to HMRC.
re: paying IHT
explain assets released without GOR
some assets i.e. chattels, cash and
money held in certain accounts up to £5k (released by court order) could be used
re: paying IHT
explain ‘bank’ funding option
may give a loan. Often want an undertaking. UT should be limited to ‘such proceeds and some into X control’. Expensive – often fees and interest.
re: paying IHT
explain grant on credit
if it is impossible to pay in advance, HMRC may allow a grant to be obtained on credit.
re: paying IHT
explain heritage property in lieu of tax
can offer HMRC an asset in lieu of tax. Secretary of state must agree. High standard. Asset must be ‘pre-eminent for its national, scientific, historic or artistic interest’
re: paying IHT
explain National Savings Bank Accounts and proceeds from National Savings Certifications / Government stock funding option
can be used to pay HMRC
re: paying IHT
what happens once IHT has been received?
- HMRC will email a receipted summary on Form IH421 to HMCTs and inform the PRs this has been done
- HMCTs will not issue the GOR until they receive this receipt
re: applying for GOR
what is the application fee?
this is the same whether applying by paper or online (determined by probate value):
o If estate is less £5,000 or less no fee
o More than £5,000 £300
re: applying for GOR
what are the key pieces of information on PA1P and PA1A?
- PA1P Only: Wills
- Applicants
- Deceased
- Settled land
- IHT and probate value
- Excepted estates
- Legal statement
re: applying for GOR - application
what information is required under PA1P only: wills?
Date of wills and codicils, details of any foreign wills and whether D married or formed a CP after making the will (as these may revoke the will)
re: applying for GOR - application
what information is required under ?
re: applying for GOR - application
what information is required under applicants?
If the name in the will is different to ID, both names must be put on the form
re: applying for GOR - application
what information is required under deceased?
- D’s name, address, DOB, DOD, where domiciled at DOD and marital status
If D held assets in different names, these must be included (otherwise, other names are not necessary)
re: applying for GOR - application
what information is required under settled land?
Whether D had vested interest in a Settled Land Act settlement (now rare due to TOLATA)
re: applying for GOR - application
what information is required under application as attorney?
- i.e. a person is applying on behalf of another (C) who is entitled to take GOR
- If C lacks capacity, medical evidence and the LPA is needed
If there is no LPA and no one other than C is entitled to take GOR, grant can be made to another person on behalf of C
re: applying for GOR - application
what information is required under IHT and probate value?
- Must confirm whether IHT400/IHT41 was completed
Must state the gross and net probate value
re: applying for GOR - application
what information is required under excepted estates?
As no IHT400 was completed, the following information is required:
o A declaration that it is an excepted estate and if they are claiming any unused NRB from a pre-deceased spouse/CP;
o Gross value of estate after IHT and specified (+exempt) transfers
o Net value of estate minus allowance debts
o Net qualifying value of the estate
HMRC has 60 days from issue of GOR to ask for additional information, if they do not the excepted estate receives automatic clearance
Transpires estate is not excepted PR must submit IHT400 within 6 months
re: applying for GOR - application
what information is required under legal statement?
Statement of truth and confirmation PRs will administer the estate in accordance with the law and that content of the form is truthful
Acknowledge that criminal fraud proceedings may be brought against them for providing evidence that is deliberately untruthful / dishonest as well as a revocation of GOR
re: applying for GOR - application
what must be enclosed?
- The will and codicil must be enclosed with the application for GOP and GLA.
re: applying for GOR - application
when should evidence be enclosed?
Evidence should accompany the application where there is doubt as to:
o Execution and/or capacity;
o Knowledge and approval
o Remote witnessing (key thing to look at for re the above 3 – is there an attestation clause? Is it defective? Has it been amended to reflect situation?)
o Plight and condition i.e. will has been altered, attempted revocation or mark suggesting something was previously attached
o Lost will if the original is lost, probate can still be obtained if there is a copy. This copy would need to be sent with the application)
re: applying for GOR - application
what is sufficient evidence?
- Sufficient evidence = affidavit or witness statement verified by a statement of truth from a relevant person such as a witness, doctor or lawyer
re: applying for GOR - application
how many people can apply?
Can be 1 PR, but advisable to have more than one.
1 PR can give the purchaser good receipt for proceeds of sale of land
Re will trusts 2 trustees or 1 trust corporation are needed
If a B has a life interest or minority interest (i.e. they are a minor):
There must be 2 administrators (A) or 1 E
re: applying for GOR - application
when must 2 PRs apply?
If a B has a life interest or minority interest (i.e. they are a minor):
There must be 2 administrators (A) or 1 E
2 trustees ad need to give good receipt for land
re: applying for GOR - application
in what circumstances does an E apply for GOP?
- i.e. D left a will with a named E who is willing to act
- E can still apply even if the will fails to dispose of the estate
re: applying for GOR - GOP
what form is used?
- Form PA1P or online (solicitor must always do online unless proving will)
re: applying for GOR - GOP
how many Es can apply?
- Max 4 Es can apply in respect of the same property (see: partial GOP)
re: applying for GOR - GOP
what can happen if more than 4 Es want GOP?
o Power can be reserved to other Es if a vacancy arises
re: applying for GOR - GOP
what happens if one of the Es lacks capacity?
They cannot apply for GOP. The other Es take GOP.
If E was the only named executor, their LPA can take GOP
re: applying for GOR - GOP
what happens if one of the Es is a minor?
GOP given to adult Es with power reserved to the minor to take grant at a later date.
If administration not completed by the time they are 18, they can apply for grant of double probate, allowing them to act alongside other Es
re: applying for GOR - GOP
what happens if there is only one named E and they are a minor?
parent/guardian will need to apply for GLA for the benefit of the minor. The grant lapses when they turn 18. If administration is not complete when they are 18, E can apply for cessate grant of probate.
re: applying for GOR - GOP
what does cessate GOP mean?
second GOP when the first was conditional or limited in some way and this has now been fulfilled.
re: applying for GOR - GOP
what is partial GOP?
where GOP is obtained in relation to only part of the estate
re: applying for GOR - GOP
when is partial GOP common?
- Common where part of the estate requires specific expertise
re: applying for GOR - GOP
what is the effect of partial GOP?
- This means there could be 4 general Es and 4 Es in relation to other assets
re: applying for GOR - GOP
what is renunciation?
someone appointed as E renounces their right to take GOP
re: applying for GOR - GOP
when can someone renounce?
- Can only renounce if they haven’t meddled in the estate i.e. selling D’s chattel
o Once they have meddled, they must take GOP
re: applying for GOR - GOP
how does someone renounce?
- Form PA15 must be signed by renouncer and witnessed by another
- If they are also a T, they will need to disclaim trusteeship
re: applying for GOR - GOP
when may power be reserved?
- Power may be reserved as above and where E does not want to initially act but does not want to take irrevocable step to renounce
re: applying for GOR - GOP
how is power reserved?
- E applies for GOP with power reserved to the other person. E must confirm in the application that they have notified the other person of the application
- If power is reserved, substitution is not automatic. The other person will need to apply in the future.
re: applying for GOR - GLA & SGLA
when can 1 A apply?
- 1 A can apply unless there is a life or minority interest, then 2 As must apply
re: applying for GOR - GLA & SGLA
what can happen where 2 As are needed?
o If there are not 2 As in the same rank to take GLA, someone from the next rank can take GLA with the other person
o The court may dispense with the need for 2 As in special circumstances
re: applying for GOR - GLA & SGLA
how many As can there be?
- Max. 4 As. It is not possible for an A to have power reserved.
re: applying for GOR - GLA & SGLA
when can a lower category apply?
- A lower category can only apply if no one in a higher category will take GLA
re: applying for GOR - GLA & SGLA
how can applications be made?
People in the same category can make joint or separate applications
o Separate applications and one has a contingent interest the court will (generally) appoint the person with the vested interest
o Joint applications different interests do not have an effect
re: applying for GOR - GLA & SGLA
where separate applications are made, what will the court generally do?
the court will (generally) appoint the person with the vested interest
re: applying for GOR - GLA & SGLA
who cannot be an A?
A minor cannot be an A nor can they apply.
o If no one else in the category is willing to apply, the parent / guardian can apply for ‘GLA for the minor’s use and benefit’ (same rules as above)
re: applying for GOR - GLA & SGLA
what will A need to set out when they make the application?
When making the application, A will need to explain:
o Why GLA is being applied for (i.e. no E was prepared to act);
o The capacity in which they are applying (i.e. residuary legatee);
o Clearing off (i.e. why those above are not applying, e.g. pre-deceased);
o Their entitlement (i.e. residuary B under IR)
- An application can be made without notice to others of equal entitlement
re: applying for GOR - GLA & SGLA
if the only person in the category is a minor, what can happen?
o If no one else in the category is willing to apply, the parent / guardian can apply for ‘GLA for the minor’s use and benefit’ (same rules as above)
re: applying for GOR - GLA & SGLA
how can A renounce?
- Any person entitled to apply can renounce using Form PA16
They would also need to renounce any trusteeship, if applicable
re: applying for GOR - GLA
how is this applied for?
- Form PA1P or online (can only do online if lots of conditions are met, i.e. 1 applicant & they are the only person entitled)
re: applying for GOR - GLA & SGLA
how is renunciation different to GOP?
- A does not lose the right to renounce by intermeddling
re: applying for GOR - GLA
when is this applied for?
Applicable when there is a will but the Es are unwilling/unable to act, i.e.:
o The will does not appoint an E;
o The will appoints a spouse/CP as sole E, but they have divorced; or
o All Es have predeceased or renounced.
re: applying for GOR - GLA
what is the order of priority?
Order of priority of those entitled to GLA where D died after 1 Jan 1926 (r20):
1. The executor
2. Residuary legatee or devisee holding in trust (i.e. the trustee(s) of the residue)
3. Residuary legatee or devisee (i.e. the recipient of the residue)
o Those with a vested interest take priority over those with a contingent one
o inc. Bs with a life interest and Bs who receive the residuary under IR
4. The PR of a deceased residuary legatee or devisee
o i.e. B survived T and took a vested interest (not inc. a life interest), but died before they obtained GOR
5. Any other legatee/devisee or creditor of D
o Those with a vested interest take priority over those with a contingent one
6. The PR of any other legatee/devisee or creditor or D (same as above)
re: applying for GOR - SGLA
when is this applied for?
D left no will or an invalid will
re: applying for GOR - SGLA
how is this applied for?
- Form PA1A or online (can only do online if lots of conditions are met, i.e. 1 applicant & they are the only person entitled)
re: applying for GOR - SGLA
who can apply for this?
- Only those with a beneficial entitlement (excl. 9 & 10) can apply
re: applying for GOR - SGLA
what is the order of priority?
- Applicable to those who D died after 1 Jan 1926 (r22) (this is the same as IR):
1. Surviving spouse/CP
2. Children of D (and their issue if the child has died)
o Under IR, a surviving spouse and children will share the estate if there are enough assets. This means they can make a joint application. However, if the child applies alone, they would first need to clear off the spouse.
o In effect, D’s grandchild could take GLA if their parent has died.
3. Parents of D
4. Full siblings (and their issue if the sibling has died)
o In effect, D’s niece/nephew could take GLA if their parent has died.
5. Half siblings (and their issue if the sibling has died) (not inc. step siblings)
6. Grandparents
7. Full aunts and uncles (and their issue if the sibling has died)
o In effect, D’s cousins could take GLA if their parent has died.
8. Half aunts and uncles (and their issue if the sibling has died)
9. Treasury solicitor if no one else has a beneficial interest in the estate and they are claiming bona vacantia on behalf of the Crown
10. Creditors and anyone who doesn’t have an immediate beneficial interest, but might in the future in the event of an accretion .
