Post Grant Steps / Administering the Estate Flashcards
Following the issue of the ‘Grant of Representation’, what 8 steps must be taken? (in chronological order)
(1) NOTIFY HMRC (changes IHT Account)
(2) S27 TA 1925 ‘NOTICE’ (protect PR from claims by Unknown beneficiaries)
(3) Collect ASSETS
(4) Pay DEBTS / EXPENSES
(5) Pay / Transfer LEGACIES
(6) Pay INCOME TAX / CGT
(7) Prepare ‘ESTATE ACCOUNTS’
(8) Distribute RESIDUE (+ obtain receipt)
Following the issue of the ‘Grant of Representation’, what 8 steps must be taken? (in chronological order)
(1) NOTIFY HMRC (changes IHT Account)
(2) S27 TA 1925 ‘NOTICE’ (protect PR from claims by Unknown beneficiaries)
(3) Collect ASSETS
(4) Pay DEBTS / EXPENSES
(5) Pay / Transfer LEGACIES
(6) Pay INCOME TAX / CGT
(7) Prepare ‘ESTATE ACCOUNTS’
(8) Distribute RESIDUE (+ obtain receipt)
How long should the PR(s) take to Administer the estate?
1 year from Date of Death (‘Administrator’s Year)
Post Grant, step (2) is ‘NOTIFY HMRC changes to IHT ACCOUNT’ (if there are).
(1) What is an example of why this would occur?
(2) If there are changes to the IHT ACCOUNT, what should the PR do?
(1) New assets discovered
(2) Send additional IHT to HMRC
Post Grant, step (4) is ‘Pay DEBTS / EXPENSES’.
(1) What is an example of a ‘Debt’ owed?
(2) What are 3 examples of an ‘Expense’?
(1) Unpaid INCOME Tax / CGT (on death)
(2)
(a) Funeral Expenses
(b) PRs Expenses
(c) Legal Fees
Post Grant, step (4) is ‘Pay DEBTS / EXPENSES’.
(1) What is are the ONLY Debts that should not be paid?
(2) What is an example of this debt?
(2) Who should pay this debt instead?
(1) SECURED Debts
(2) Mortgage on property
(3) Beneficiary (i.e. beneficiary takes property with mortgage)
GENERALLY what part of the Estate is used to pay the DEBTS / EXPENSES?
Residue
Post Grant, step (5) is ‘Pay / transfer LEGACIES’.
In what order should ‘Legacies’ be paid?
(1) Specific Legacies
(2) General / pecuniary legacies
Post Grant, step (5) is ‘Pay / transfer LEGACIES’.
If a legacy is to a MINOR, what are 2 possible options the PR has if the will is silent?
(1) PR hold legacy on TRUST until adult
(2) PR can appoint PARENT / GUARDIAN TRUSTEE
Post Grant, step (6) ‘Pay INCOME TAX / CGT’. For CGT:
(1) When would this be paid?
(2) How is the ‘gain’ measured. ‘Difference between…….
(1) PRs DISPOSE (of estate asset) & make GAIN
(2) Difference between VALUE of Asset at DEATH & SALE / DISPOSAL price
Post Grant, step (6) ‘Pay INCOME TAX / CGT. For Income Tax:
(1) When would this be paid?
(2) what is the Exception to this? 2 components
(1) Income estate received during administration (e.g. income from rental property)
(2)
(a) SAVINGS INCOME
(b) Less than £100
Post Grant, step (7) ‘Prepare ‘ESTATE ACCOUNTS’.
What are the 2 purposes of the ‘ESTATE ACCOUNTS’?
(1) VALUE Residue
(2) DISCHARGE PRs after Residue distributed
