Probate Practice Flashcards
Study aid designed for CILEx Unit 21 Probate Practice
s3(1) I(PFD)A 1975
Common guidelines (all applicants):
- financial needs and resources of App. and Bs
- moral obligations of D towards App. and Bs
- size and nature of the estate
- physical or mental disability on the part of the App. and Bs
- other relevant matters (e.g. lifetime provisions or conduct)
s. 1(1) I(PFD)A 1975
Categories of applicant:
- Surviving spouse
- Former spouse (providing no remarriage)
- Cohabitee (> 2 years immediately prior to death as H&W)
- Child of D (includes unborn, adopted and illegitimate)
- Treated as a child (e.g. step-child)
- Maintained person (wholly or partially maintained immediately prior to death without full valuable consideration)
s1(2) I(PFD)A 1975
Is the provision made in the will reasonable enough?
(a) Such provision for surviving spouse as should be reasonably afforded (not just for maintenance)
(b) Such provision for other applicants as required for their maintenance
Non-probate estate property
Property held as joint tenants Nominated property Insurance policies written in trust Discretionary trust Life interest trusts
Pre-22/3/06 WT or IV Trust
Deemed an ‘interest in possession’
Capital classed as an asset of the estate for IHT
Post-22/3/06 IV Trust
Deemed a ‘relevant property trust’
Capital NOT classed as an asset of the estate for IHT
Post-22/3/06 WT
Deemed an ‘immediate post-death interest’
Capital classed as an asset of the estate for IHT
Post-Death Variation (PDV)
Must be made within 2 years of death PRs may (with B's authority) execute a PDV
Business Property Relief (BPR)
Lifetime and death transfers
Qualification requirements:
- Shareholding (any amount for Ltd, controlling for PLC)
- Trading company (not purely investment)
- Held for minimum of 2 years (N.B. unless inherited from spouse who had held for more than 2 years)
Value of IHT relief:
100% if a private company
50% if a controlling interest in a PLC
50% for any land/property used by business but owned by deceased
Burden of IHT - lifetime gifts/failed PETs
Generally payable by donee unless will states otherwise (e.g. ‘to pay from residue any IHT arising by virtue of my death’)
Burden of IHT - IPDI/interest in possession
IHT liability is to be apportioned to the trustees (not PRs)
IHT taper relief
Lifetime transfer
For transfers made < 7 years ago:
- Apply exemptions
- Deduct from NRB
- Remainder is chargeable to IHT as per following scale:
a) 0-3 years from death: 40%
b) 3-4 years from death: 32%
c) 4-5 years from death: 24%
d) 5-6 years from death: 16%
e) 6-7 years from death: 8%
IHT annual gift exemption
£3000 per tax year (N.B. Can carry forward unused amount from previous tax year)
Deadline for payment of IHT
6 months from the end of the month in which the deceased died
Apportionment of IHT
[ASSET] / [TOTAL CH. ESTATE] x TOTAL TAX
Small gift exemption
Lifetime transfers
£250 to any one donee in any one tax year is totally exempt
N.B. If a larger gift is given, then the whole gift is chargeable
Gifts in consideration of marriage
Lifetime transfers
£5000 from a parent of party to the marriage
£2500 from other relations of party to the marriage
£1000 in all other cases
N.B. Only the excess is taxable if a larger gift is given
Spouse exemption
Lifetime/death transfers
Fully exempt from IHT
Charity exemption
Lifetime/death transfers
Fully exempt from IHT
N.B. If D dies after 5/4/12 and leaves > 10% of net estate to charity, then may claim a 4% reduction in IHT on remainder of estate
Transferable NRB entitlement
D’s NRB may be increased if:
- D died after 9/10/07
- D was a surviving spouse
- D’s spouse had not used their full NRB
Transferable NRB calculation
- Calculate percentage available for increase:
Unused NRB / NRB rate in force at time of death of D’s spouse x 100 = x%
- Increase D’s NRB rate by this percentage:
NRB rate in force at time of death of D x 1.x = New NRB threshold
Requirements for a valid will
- Testamentary capacity of T
- Intention to make will
- Observe formalities
Testamentary capacity of T
Two-fold test for testamentary capacity:
a) T must have legal capacity (i.e. over 18, unless privileged will)
b) T must have mental capacity (cf. Banks v Goodfellow/MCA 2005)
Banks v Goodfellow [1870]
T deemed to have mental capacity to make a will if:
a) T understood the nature of the effect and its effect (i.e. T was of sound mind)
b) T comprehended the extent of his property (i.e. T was of sound memory)
c) T recognised the claims to which he ought to have regard (i.e. T was of sound understanding)
s1(2) MCA 2005
A person is presumed to have capacity unless it is established otherwise
s2(1) MCA 2005
A person lacks capacity if, at the material time, he is unable to make a decision for himself because of an impairment of or disturbance in the functioning of the mind/brain
s3(1) MCA 2005
A person is unable to make a decision for himself if he is unable to understand the information relevant to the decision and to retain/use/weigh up that information to communicate his decision
Scammell v Farmer [2008]
Rules of MCA 2005 are a modern restatement of the common law test in Banks v Goodfellow [1870]
Parker v Felgate [1883]
Generally, testamentary capacity is required at the point of signing, unless it can be shown that:
- T had capacity at time of giving instructions to prepare will;
- will was prepared in accordance with those instructions; and
- T knew he was signing a will for which he had given instructions
Golden rule
Since a solicitor owes a DoC to the T and intended Bs, any doubt as to the T’s mental capacity or intention should give rise to a medical assessment and detailed file note
Intention of T
- T must know and approve the contents of his will at the date of execution (cf. Parker v Felgate [1883])
- Rebuttable presumption (on grounds of fraud, fear, mistake or undue influence) that a T with capacity has necessary intention, unless:
a) T is blind, illiterate or will signed on his behalf;
b) suspicious circumstances (e.g. benefitting drafter)
s9 WA 1837 - Formalities for execution
- Must be in writing (pencil is only deliberative)
- Must be signed by T (or by another in his presence and at his direction)
- Must intend to give effect to will by signing (mistakenly signing wrong will is invalid)
- T must sign/acknowledge signature in presence of two witnesses present simultaneously
- W should sign/acknowledge in T’s presence (but no need to do so in presence of other W)
Attestation clause
- Not strictly necessary, but if not included then the Registrar will request an affidavit of due execution
- Simplest wording is “Signed by T in our presence and then by us in his”
- Adaptation will be required for T with physical impediment, e.g. blind
- Strong evidence would be required to challenge due execution if an attestation clause is present (Sherrington v Sherrington [2005])
Execution arrangements
Solicitor should take reasonable steps to ensure due execution (written instructions alone are not likely to be sufficient) - e.g. a house visit or appointment at the office
IHT valuation rules
Generally, the open-market value is used as at the date of death, with some exceptions:
- Quoted securities (valued as per LSE official daily list for nearest date of transfer) - losses may be offset if sold by PRs within 12 months of death
- Land - losses may be offset if sold on the open market within 4 years of death
- Life assurance policies - Value for lifetime transfer is the surrender value or the total of premiums paid (whichever is the greater)
Revocation of a will
- By marriage, unless will made after 1/1/83 (s18 WA 1837) and it is clear from the will that T:
a) expected to marry a particular person; and
b) did not intend for will to be revoked by that marriage - By later will/codicil (either with express words of revocation or to the extent it is inconsistent)
- By sufficient act of destruction (e.g. burning, tearing) with intention to revoke, either:
a) by T; or
b) at direction of T in T’s presence
N.B. Revocation of a will does not automatically revive an earlier will
s21 WA 1837
- No alteration or obliteration made after execution shall be effective unless executed in the same manner as the will
- Rebuttable presumption that an unattested alteration is made after execution
Partial obliterations
If the original wording remains decipherable ‘by natural means’, the will is admitted to probate with an engrossment and the original wording is not revoked
Total obliterations
If the original wording is not decipherable, the will is admitted to probate with a blank space and is effective to revoke the original wording
Divorce, dissolution or nullity
- No revocation of will
2. Former spouses are deemed to have predeceased and any gifts to them pass as if they were not alive
Republication
Achieved either by:
- re-execution of the same document; or
- execution of a codicil referring to the earlier document
Republication of earlier will take effect from date of re-execution/execution of codicil
s22 WA 1837 - Revival
A will revoked otherwise than by destruction may be revived either by:
- re-execution of an earlier will; or
- execution of a codicil showing intention to revive earlier will
Revival of earlier will take effect from date of re-execution/execution of codicil
Incorporation of other documents
A document may become part of a will if it is:
- dispositive (i.e. list of legacies);
- clearly identified in the will; and
- already in existence at the date of execution of will
N.B. Such documents, if incorporated, will be admitted to probate (and thus public), so it is not a means of keeping terms of will secret
Survival time for spouse of intestate
28 days
Intestacy - Spouse only
Whole estate absolutely
Intestacy - Spouse and issue
Spouse:
- personal chattels (s.55(1)(x) AEA 1925)
- statutory legacy of £250k + interest, free of tax
- life interest in half of the residue
Issue:
- half residue absolutely (on statutory trusts)
- remainder interest in other half of residue
Intestacy - Spouse but no issue, yet parents/siblings (or their issue) of whole blood
Spouse:
- personal chattels (s.55(1)(x) AEA 1925)
- statutory legacy of £450k + interest, free of tax
- half of residue absolutely
Parents, if none, siblings (or their issue):
- other half of residue on statutory trusts
s.47 AEA 1925
Statutory trusts are trusts imposed by law where a class of beneficiary is entitled to a share of the estate under the intestacy rules.
Members of the class (incl. en venture sa mère) will share inheritance equally upon (the earlier):
a) reaching 18; or
b) marriage
Issue of any predeceased class member will inherit per stirpes upon (the earlier):
a) reaching 18; or
b) marriage
Intestacy - No spouse
Whole estate passes absolutely according to the statutory orde of priority:
- issue (on statutory trusts)
- parents
- brothers/sisters of the whole blood (or their issue - on ST)
- brothers/sisters of the half blood (or their issue - on ST)
- grandparents
- uncles/aunts of the whole blood (or their issue - on ST)
- uncles/aunts of the half blood (or their issue - on ST)
- Crown/Duchies of Lancaster or Cornwall as bona vacantia
s.47A AEA 1925
Spouse has a statutory right of redemption of their life interest in half of the remainder of an intestate’s estate, subject to:
- the application being made within 12 months of the date of the grant of representation (unless extended by order of the court);
- the property is in possession (i.e. no remainder interests passing on death); and
- notice is given by B to PRs or court (if B is also sole PR)
Will drafting considerations - Commencement
- Full name and address of T
- Appropriate revocation clause (full or partial)
Will drafting considerations - Appointment of executors/trustees
- Unlimited number can be appointed (N.B. only 4 may apply for a grant)
- Normal to appoint same people as executors and trustees
- 2 better than one (back up if one dies) and should be younger than T
- Must be over 18 and of sound mind
- Charging clauses for professional trustees
Will drafting considerations - Appointment of guardians
- Appropriate if T has minor children
- Takes effect if spouse has predeceased
Will drafting considerations - Specific and pecuniary gifts
- Identify B and subject matter sufficiently clearly
- Express stipulation as to where IHT burden should fall
- Free of mortgage (with appropriate provision)
- Charitable gifts require correct name (allow for merger/change of name/objects) and receipt clause
- Are legacies to be vested or contingent?
- Provision for receipt for gifts to minors
- Avoid doctrine of ademption/lapse
- Extend s.33 substitution to gifts not going to T’s issue
Will drafting considerations - Residue
- Express provision as to IHT burden
- Use substitution/accrual to avoid partial intestacy
- Successive interests should give life tenant power to consent to sale of trust property
- Survivorship clause to prevent double administration, IHT bunching or s.184 LPA commorientes rule
Will drafting considerations - Administrative powers
- Exclude s.41 AEA 1925 requirement for consent of B to appropriation of property to satisfaction of a legacy in B’s favour
- Grant PRs power to continue D’s business as a going concern
- Extend powers of s.32 TA 1925 to allow advancement of B’s whole share at trustee’s unfettered discretion
- Extend s.32 TA 1925 to give trustees discretion to apply income and continue power beyond age of 18 if gift vests later
Will drafting considerations - Testimonium and execution clause
- Add date of execution
- Include attestation clause to benefit from rebuttable presumption of due execution
- Ensure execution block contains space for T and two Ws to sign
- Avoid B also being a witness (s.15 WA 1837 failure)
General principles of will construction
- Family Division courts only have power to construe will for the purpose of determine title to a grant of representation
- Chancery Division courts responsible for interpretation of will’s contents
- Non-technical words given ordinary meaning (Perrin v Morgan)
- Technical words given their technical meaning (Re Cook)
s.21 AJA 1982
Extrinsic evidence to aid interpretation of a will is only admissible where:
- any part of the will is otherwise meaningless;
- language used is ambiguous on the face of it; or
- language used is ambiguous in light of surrounding circumstances
N.B. Extrinsic evidence may not be used to create a new will (Re Williams)
s.24 WA 1837
- Will speaks from date of death as regards property (N.B. doctrine of ademption)
- Will speaks from date of execution as regards Bs (N.B. doctrine of lapse)m so republication can affect B’s entitlement
Immediate vested gift to class, e.g. children of X
Class closes upon death of T if X has any child living at that date (incl. en ventre sa mère). Otherwise, remains open until death of X.
Deferred vested gift, e.g. to A for life, remainder to children of X
Class closes when postponement ends, i.e. death of A, provided X has at least one child living at that date. Otherwise, class remains open until death of X.
Immediate contingent gift, e.g. to children of X who attain age of 18
Class closes at death of T if any of X’s living children has already satisfied the contingency. Otherwise, remains open until contingency is fulfilled.
Deferred contingent gift, e.g. to A for life, remainder to children of X who attain age of 18
Class closes at end of postponement, i.e. death of A, provided any of X’s living children has already satisfied the contingency. Otherwise, class remains open until contingency is fulfilled.
Early closing
If the postponement of a deferred gift ends before death of T, e.g. A predeceases T, then the class is accelerated to an immediate vested/contingent class gift
Individual gifts to members of a class, e.g. £500 to each of X’s children
Where value of gift is certain (i.e. not a share but a fixed sum), then gift goes to all members living at time of T’s death. If none is alive, gift lapses.
Specific legacy, e.g. I give to X my yellow Rolls-Royce
- Gift of a particular item distinguished from other property of same type
- Adeems if not extant at T’s death
- Abates last
General legacy, e.g. I give to X a yellow Rolls-Royce
- Gift of an item not distinguished from other property of same type
- Never adeems
- Abates before specific legacy
Demonstrative legacy, e.g. I give to X £100 put of my Barclays account
- As a general legacy, but a specific fund is indicated for its satisfaction
- Does not adeem
- Abates as a specific legacy
- If fund specified contains insufficient monies, balance is payable from residue
Failure of a gift
- Ademption - gift no longer part of estate
- Lapse - gift falls to residue
- Uncertainty - gift falls to residue if B uncertain, otherwise no longer part of estate
- s.15 WA 1837 - gift falls to residue
- Forfeiture by way of illegality/immorality - gift falls to residue
- Disclaimer - gift falls to residue
Ademption
Specific legacy will adeem if property not in T’s possession at date of death, unless:
- right to replacement or proceeds is expressly included in will
- wording allows for change of nature of property, e.g. company name
Lapse
A gift to a B that predeceases T will lapse, unless:
- s.184 LPA applies to determine order of death
- s.33 WA 1837 applies where gift is to issue of T
s.15 WA 1837
A gift to W (or spouse of W) will fail, unless
- marriage post-dates execution of will
- there are two other non-beneficiary Ws
- gift only given to W to hold on trust
Forfeiture/disclaimer
A gift (by will or arising on intestacy) that has been forfeited or disclaimed by A will fail, unless saved by Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011, provided:
- T died after 1/2/12; and
- A is issue of T or A was entitled under intestacy rules
In which case, A is deemed to have predeceased and the issue of A will take under:
- s.33 WA 1837, subject to any contrary intention in the will; or
- intestacy rules
r.20 NCPR 1987
Where an application is made for a grant of letters of administration (with will annexed), the order of entitlement is:
- Trustee of residue
- Residuary B (by virtue of will or intestacy)
- PR of residuary B
- Other Bs or creditors
- PR of other Bs or creditors
r.22 NCPR 1987
Where a grant of letters of administration is sought in the case of intestacy, the order of entitlement is:
- Surviving spouse
- Children/issue of predeceased children
- Parents
- Siblings of whole blood
- Siblings of half blood
- Grandparents
- Uncles/aunts (or their issue) of whole blood
- Uncles/aunts (or their issue) of half blood
- Treasury Solicitor
- Any creditor of D
Chain of representation
If sole/last surviving proving executor (A) dies testate prior to completion of administration of T’s estate, A’s executor(s) may automatically continue administration of T’s estate upon taking probate of A’s will, with chain continuing indefinitely until such time as:
- a grant of double probate of T’s incomplete estate is made; or
- the sole/last surviving proving executor in the chain:
- dies intestate;
- fails to appoint executor; or
- leaves a will that executor fails to prove.
N.B. A broken chain requires a grant de bonis non administratis
Types of limited and special grants
- Grant of letters of administration ad colligenda bona
- Limited grant of probate as to specific purpose or property
- Grant of letters of administration durante minore aetate
- Grant of letters of administration during mental incapacity
- Grant of letters of administration de bonis non administratis
- Grant of double probate
- Cessate grant of probate/letters of administration
Capacity of PR
- over 18
- of sound mind
- not deemed unfit by court (s.116 SCA 1981) to take grant, e.g. bankrupt, missing or otherwise unfit
Renunciation of entitlement to grant
Executors and administrators may renounce grant if done so:
- after T’s death;
- in writing; and
- prior to accepting grant
N.B. An executor may only renounce if he has not yet intermeddled in the estate. Paying funeral expenses does not count as intermeddling.
Form IHT205
May be used if the estate satisfies the criteria for exception from IHT by virtue of being:
- a low value excepted estate
- an exempt excepted estate
- a foreign domiciliary excepted estate
Low value excepted estate
An estate qualifies as a low value excepted estate if:
- specified transfers (i.e. lifetime gifts) in last 7 years; and
- gross value of IHT estate
do not, together, exceed current NRB (plus transferable NRB if 100% available), and provided:
- D was domiciled in UK at time of death;
- value of specified transfers (incl. exempt) does not exceed £150k;
- value of settled property does not exceed £150k; and
- value of foreign property does not exceed £100k
N.B. Complete 1st paragraph of oath form
Exempt excepted estate
An estate qualifies as an exempt excepted estate if:
- specified transfers (i.e. lifetime gifts) in last 7 years; and
- gross value of IHT estate
do not, together, exceed £1m, and provided:
- D was domiciled in UK at date of death; and
- the net value of the IHT does not exceed current NRB (plus transferable NRB if 100% available)
N.B. Complete 3rd paragraph of oath form
Foreign domiciliary excepted estate
An estate qualifies as a foreign domiciliary excepted estate if:
- D was never domiciled in UK; and
- gross value of D’s UK estate did not exceed £150k, where such assets comprised cash and unquoted securities only
N.B. Form IHT 207 must be completed
Disclaimer
B may disclaim/renounce a gift, provided:
- he informs PR of intention either in writing or orally;
- he has not already accepted a benefit of the gift; and
- his disclaimer relates to the whole gift not just part
Legal effects of a disclaimer
If B was entitled on intestacy and disclaims, s.1 Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act operates and B is treated as having predeceased, so normal intestacy rules apply.
If B was entitled under a will and disclaims, s.2 EDP(FRLS)A treats B as having predeceased, so will is construed accordingly, e.g. substitution provision may apply (if drafted widely enough) or s.33 WA 1837 may operate
Taxation effects of a disclaimer
Provided that a disclaimer is made:
- in writing;
- in the absence of consideration for money or money’s worth; and
- within 2 years of D’s death,
then it will be read back upon taking effect, so that it does not constitute:
- a transfer of value by the original B for IHT purposes; or
- a disposal by the original B for CGT purposes.
Therefore, the new recipient is treated as having acquired the gift directly from D, so the tax position is calculated accordingly.
N.B. This does not apply to income tax on a gift, which original B remains liable for up to date of disclaimer.
Variation
A gift acquired by will or upon intestacy may be varied by a B, provided that:
- B is of full age;
- B is of sound mind; and
- notice of intention is given to PR either orally or in writing
N.B. A variation may still be made if it relates only to part of the gift and/or B has already accepted some benefit
Legal effects of a variation
B may elect a new recipient for (part of) the gift when making the variation
Taxation effects of a variation
Provided that a variation is made:
- in writing;
- in the absence of consideration for money or money’s worth; and
- within 2 years of D’s death,
then it will be read back upon taking effect, so that it does not constitute:
- a transfer of value by the original B for IHT purposes; or
- a disposal by the original B for CGT purposes,
subject to the inclusion of a statement that the provisions of s.142 IHTA 1984 and s.62 TCGA 1992 shall apply
If so, the new recipient is treated as having acquired the gift directly from D, so the tax position is calculated accordingly.
N.B. This does not apply to income tax on a gift, which original B remains liable for up to date of variation.
Powers of PRs
- (s.39 AEA 1925) Alienation
- (s.41 AEA 1925) Appropriation
- (s.42 AEA 1925) Appointment
- (s.44 AEA 1925) Postponement
- (s.31 TA 1925) Maintenance
- (s.32 TA 1925) Advancement
- (s.3 TA 2000) Investment
- (ss.11-23 TA 2000) Delegation
- (s.34 TA 2000) Insurance
s.39 AEA 1925
PR has power of:
- alienation (incl. mortgage and charge) in respect of personal property; and
- an absolute owner in respect of real property (Part I TLATA 1996)
s.41 AEA 1925
PR has power of appropriation (i.e. transfer of specific asset is (partial) satisfaction of any legacy), provided:
- no other B is specifically entitled to that asset;
- B consents to the appropriation;
- value of asset does not exceed B’s entitlement; and
- PR obtains consent of other Bs if appropriation:
- is for his benefit; and
- relates to a non-cash/cash equivalent asset
N.B. Value of asset is calculated at date of appropriation (not death), unless the will specifically authorises the use of the death value
Kane v Radley-Kane [1998]
‘Self-dealing’ prohibitions for trustee also apply to sole PR, meaning a sole PR cannot appropriate an asset in favour of himself without the consent of the other Bs (else voidable at insistence of other Bs on grounds of conflict of interest)
N.B. Self-dealing restrictions do not apply in the case of cash/cash-equivalent assets
s.42 AEA 1925
To obtain valid receipt, PRs may appoint trustees of property left to a minor B with an absolute entitlement to a legacy.
Power of appointment allows nomination of 2-4 Ts or a trust corporation.
s.44 AEA 1925
PRs are not bound to distribute property within first year of T’s death (“executor’s year”)
s.31 TA 1925
If minor B has a right to immediate income of a gift (i.e. owing to a specific or residuary legacy), then PR may apply the income for:
- maintenance;
- benefit; or
- education
of minor, and any income not so applied must be accumulated.
N.B. Income from contingent pecuniary legacies generally applies to residue (unless T stands in loco parentis for intended B)
s.32 TA 1925
PR may (at their discretion) advance up to one half of the capital share of a trust to which B is entitled (whether by way of a vested or contingent interest)
N.B. Where B’s interest is deferred, the written consent of the life tenant is also required prior to any advancement.
ss.3 & 8 TA 2000
PR has the power to make any investment for any purpose, including the acquisition of land, that he would be entitled to make if he were absolutely entitled to the property
ss.11-23 TA 2000
PR may delegate certain powers to an agent (e.g. stockbroker, solicitor, banker, etc.) at such remuneration as he deems appropriate.
N.B. PR has a duty to keep the actions of his agent(s) under review and must intervene if necessary
s.34 TA 2000
PR has power to insure property for its full value (not just fire cover)
Grant of letters of administration: life tenants or minors
Where the intestacy rules provide for: - one or more life interests; and/or - a legacy to a minor beneficiary, then the grant must be taken by: - at least two administrators; or - a trust corporation
s.25 AEA 1925
The functions of a PR are to “collect and get in the real and personal estate of the deceased and administer it according to law”, i.e. PR must:
- collect and safeguard the assets;
- pay the debts of D; and
- distribute the net estate to Bs
s.1 TA 2000
When performing his statutory functions (s.25 AEA 1925), PR must exercise “such care and skill as is reasonable in the circumstances” towards the estate and Bs.
N.B. Will may exclude this DoC.
Bartlett v Barclays Bank [1980]
Standard of care owed by a professional PR is higher than a lay PR
Remedies for breach of DoC by PR (devastavit)
- General administration actions (CPR Part 64)
- Personal claim against PR
- Tracing
- Personal claim against recipient
Documentation required to obtain grant
- Appropriate oath form, duly sworn
- IHT421 (if IHT400 sent to HMRC) or IHT205
- Probate fees
- Original will/codicils, together with 2x copies
- Further affidavit evidence (if required)
IHT217
Form to transfer fully-unused NRB of former spouse that has predeceased when completing form IHT205 for an estate that would otherwise qualify as an exempt excepted estate
IHT402
Form to transfer unused NRB of former spouse that has predeceased
N.B. Not to be used to transfer 100% of NRB in support of a claim for an exempt excepted estate
Affidavit of due execution
Required if there is no attestation clause (or the attestation clause is deficient) and/or to support claim for due execution where no rebuttable presumption exists (e.g. blind/illiterate T, signed by someone other than T)
Given by one of the attesting Ws, if possible, or someone else present at execution.
N.B. Registrar may also require notice of application to be given to any B who would be prejudiced by grant of probate
Affidavit of date
Required if will has no, incomplete or conflicting date
May be given by anyone, but normally one of Ws
N.B. If no date can be adduced, an affidavit of search will be needed to confirm that no other (later) will has been found
Affidavit of alteration
Required if will contains any unattested alterations
May be given by anyone, but normally one of Ws or anyone else present
N.B. An engrossed copy of the will omitting any inadmissible alterations or including blank spaces for total obliterations should be prepared and submitted along with application
Affidavit of plight and condition
Required if the appearance of the will suggests:
i) attempts have been made to revoke it; or
ii) other testamentary documents may exist
In the case of i), the affidavit should be given by one of Ws to confirm that the will is in the same condition (or only minor damage) as at execution
In the case of ii), the affidavit should be given by the author of the alleged attachment.
N.B. If such persons cannot give the required affidavit, an affidavit of search will be required to confirm that no other testamentary documents are in existence.
Affidavit of accidental destruction
Required if the will was revoked by accidental destruction and a copy is to be admitted instead
May be given by anyone and should state the circumstances giving rise to the accidental destruction, making it clear that the will:
- was not destroyed by T or someone acting at T’s instruction in T’s presence; and
- T did not intend to revoke it
Caveat
- No grant may be issued without notice to caveator
- Application in person/by post (at caveator’s risk) to any registry by a person interested in the estate
- Must be in writing and state name and address of D, date and place of death and name and address of caveator
- Effective from day after it is lodged for six months (renewable during last month)
N.B. A separate caveat is required for each person
Warning
- Used to challenge a caveat and requires caveator to state his interest
- Application by post to Leeds District Registry
- Must be in writing
- Caveator should do one of the following:
- withdraw caveat;
- enter an appearance; or
- issue and serve a summons for direction
N.B. If the caveator fails to respond to warning (within 8 days), the caveat is ‘warned off’ and is removed.
Withdrawal of caveat
May be done at any time (unless caveator has entered an appearance, when court proceedings will commence)
N.B. If withdrawn after a warning, caveator must give notice of withdrawal to person warning, who is then free to proceed with the grant
Entering an appearance
Where the caveator has a contrary interest to the person warning, he has 8 days to apply in writing to Leeds DR by post stating this interest
e.g. E claims grant of probate, but caveator opposes on grounds of invalid will
Issuing and serving summons for directions
Where the caveator has an equivalent interest to the person warning, he has 8 days to apply for directions from Registrar/DJ as to who is entitled to grant
e.g. same degree of entitlement under r.20 or r.22 NCPR 1985
Standing search
Used where a caveat would be inappropriate (because there is no dispute as to the right to a grant) and person wishes to be informed when a grant is issued
e.g. to enable them to make a claim under I(PFD)A 1975 or as a creditor
N.B. A standing search lasts for 6 months and is renewable at the end of that period
Applicant will be sent an office copy of the grant and the will (if any) issued 12 months prior or 6 months after the search application
Citation
- Used where a person entitled to a grant has delayed, declined to apply or refused to renounce
- Citor muct first issue a caveat and then apply in person or by post requesting the Registrar to issue a citation:
- to take probate;
- to accept or refuse a grant; or
- to propound a will
N.B. Once served on citee (either personally or by advertisement), the citee has 8 days (one month for an advertisement) to enter an appearance and take a grant.
Citation to take probate
May be used by anyone interested in the estate to compel an E who has intermeddled to take a grant
The citation application may only be made:
- at least six months after D’s death; and
- where there is no pending challenge to the will’s validity
Failure of citee to make an appearance (or has done but taken no further action) may apply for an order:
- to compel citee to take grant; or
- to allow another to take grant
Citation to accept or refuse a grant
May be used by any applicant entitled to a grant were the citee to renounce
This citation application must:
- state title of citee to grant;
- clear off any applicant with a prior right; and
- establish title of citor
Failure to enter an appearance (or to take further action after an appearance) will allow citor to apply for an order to take a grant himself
N.B. If citee was an E to whom power was reserved, then any order allowing citor to take a grant will include the requirement to note on the grant that citee had failed to appear/respond (but such notation will not appear if citee renounces after having been served citation)
Citation to propound a will
May be used by anyone interested in the estate under an earlier will to force anyone interested under a later will to prove that will or stand aside
Such a citation must be:
- directed at all persons interested under the alleged will; and
- related to a will not merely a codicil thereto
Where citee fails to appear (or has appeared but taken no further steps), the citor may apply for an order to:
- obtain a grant of the earlier will himself; or
- allow another to obtain a grant of the earlier will.
Raising funds to pay IHT
- Sale of assets
- D’s cash reserves (via Direct Payment Scheme to HMRC)
- Bank loan with first proceeds undertaking
- Loan from Bs or PRs
s.27 TA 1925
PR will be protected from liability towards an unknown B or creditor if PR gives notice of his intention to distribute:
- in the London Gazette;
- any local newspaper where land is situated; and
- any other place that may be required
N.B. PR will be protected against a B or creditor not responding to the notice within two months of its publication, but such claimant may pursue other Bs
Protection against missing Bs
N.B. A notice under s.27 TA 1925 does not protect a PR if he has notice of a B’s claim but simply cannot trace him
- Pay missing B’s share into the court
- Distribute to other Bs and obtain indemnity from them
- Benjamin order (or presumption of death)
- Insurance cover
- Services of an heir hunter
CGT - Annual net chargeable gains
- Total all chargeable gains in tax year (G)
- Total all chargeable losses in tax year (L)
- Use Annual Allowance (A)
G - L - A = Net chargeable gains
CGT Annual Allowance 2013-14
10,900 GBP (5,450 GBP for trustees)
N.B. PRs are entitled to full annual allowance amount for year of administration + next 2 tax years
Basic rate income tax threshold 2013-14
32,010 GBP at 20%
N.B. PRs have no personal allowance and only pay basic rate income tax, so higher-rate Bs receiving any income may be liable to a further charge to income tax
Calculate CGT rate applicable
Deduct annual net chargeable gains (N) and total taxable income in tax year (Y) from basic rate income tax threshold (T)
CGT Rate (x) = (N + Y) - T
- If x is negative, annual net chargeable gains (N) are charged at 28%.
- If N, x, then x is charged at 18% and (N - x) is charged at 28%
N.B. PRs always pay a standard rate of 28% irrespective
