will weeks 4 additional Flashcards
Gross value of the estate
The total value of the estate for IHT purposes, plus any specified transfers and specified exempt transfers made in the seven years before death (like lifetime gifts).
This figure given to PR because they are ones administering estate and they will pay debts and other costs
Net value of the estate
The gross value, minus allowable debts (e.g., funeral expenses, outstanding bills).
Net qualifying value:
he net value of the estate minus any exemptions for assets left to a spouse, civil partner, or charity (since these transfers are exempt from IHT).
Category 1 – Small Excepted Estates
Definition: Estates where the gross value is below the NRB threshold (£325,000) including specified transfers.
Conditions:
The deceased was domiciled in the UK. The gross value of the estate (before debts/exemptions) + any transfers in the last 7 years does not exceed £325,000.
No chargeable transfers exceeding £250,000 were made in the 7 years before death.
No more than £100,000 of the estate is situated outside the UK.
Settled property cannot exceed £250,000.
Procedure:
PRs do not submit IHT400.
Provide basic details (name, date of death, and declaration confirming it’s an excepted estate).
Category 2 – Exempt Excepted Estates
Definition: Estates where the majority of the estate is exempt due to the spouse or charity exemptions.
Conditions:
The gross value of the estate (including specified transfers in the last 7 years) must not exceed £3 million.
Trust property in the estate must not exceed £250,000 (chargeable) or £1 million (including exempt).
No chargeable transfers exceeding £250,000 were made in the last 7 years.
Net chargeable estate after deducting spouse/charity exemptions + liabilities must be under the NRB (£325,000).
Can claim transferable NRB from a pre-deceased spouse.
Procedure:
PRs do not submit IHT400.
Provide only basic details (name, date of death, declaration confirming exempt status)
Category 3 – Non-Domiciled Excepted Estates
Definition: Estates where the deceased was non-domiciled in the UK and owned only limited assets in the UK.
Conditions:
The deceased was never domiciled or treated as domiciled in the UK.
The gross value of the UK-based estate (including specified transfers) must not exceed the NRB threshold of £325,000.
No chargeable transfers exceeding £250,000 were made in the last 7 years.
UK-based assets only.
Procedure:
PRs provide only basic information on the probate application (name, date of death, declaration confirming it is an excepted estate).
No detailed IHT form unless selected for review by HMRC within 60 days.
ey Terms – Specified Transfers & Exempt Transfers
Specified Transfers: Transfers (cash, personal chattels, quoted shares, UK land) made in the 7 years before death that count towards the estate value.
Exempt Transfers: Transfers made to a spouse, charity, political party, etc., during the 7 years before death that do not count for IHT.
What is Nil Rate Band (NRB) and Transferable NRB
NRB: The amount up to which an estate is not liable to IHT. Currently set at £325,000.
Transferable NRB: If a spouse or civil partner died without using their NRB, the unused portion can be transferred to the surviving spouse’s estate, increasing their NRB. (look at it from % pop)
When is an IHT400 Form Required?
n IHT400 form is required if:
The estate exceeds the NRB threshold.
There are significant lifetime gifts exceeding £250,000.
The estate does not meet the conditions for being an excepted estate.
The estate includes complex assets like unquoted shares or significant non-UK assets.
What Happens if the Estate is Selected for Review? (for excepted estate number 3)
selected for review, HMRC may request:
Detailed information about the estate (assets, liabilities, and transfers).
Supporting documents like valuations or legal paperwork.
HMRC typically has 60 days after the probate application to request this information.
net probate value vs net chargeable estate for IHT
Not probate value: what PRs will beneficially MINUS any debts or expenses (gross value of estate- debts/expenses)
Net chargeable estate for IHT: net qualifying value estate for IHT so you put everything which charges IHT MINUS expenses & exceptions
LOOK AT WILLS WK4 the document
Do PA1P & PA1A need statement of truth?
YES- applicants for grant of probate// letter of administration are confirming they will administer estate in accordance to law and content of submitted form is truthful.
Criminal proceeding for fraud and
What information is included in the signature section after the statement of truth?
Each applicant must sign, insert their name, and add the date.
Who can sign the PA1P/PA1A if the applicant has legal representation?
The legal representative can sign on behalf of the applicant, but the grant will still be issued in the applicant’s name.
What happens if an applicant’s legal representative signs the form on their behalf?
The legal representative signs, but the grant will still be issued under the name of the applicant listed in the form.
if X is married to testator and then gets divorce what happens? assuming before testator death
Any gifts to X from the will fail and their appointment as executor ceases.
if x is sole executor and the previous situations occurs what happens?
the grant would be a grant of letters of administration with the
will annexed
Can a person appointed as executor who lacks decision-making capacity at the testator’s death apply for the grant?
No, they cannot apply for the grant. The other executors will take the grant.
What happens if the only executor lacks capacity?
Their attorney, appointed under an enduring or lasting power of attorney, can take the grant in their place.
What happens when one of several executors is a minor?
Probate can be granted to the adult executor(s), with “power reserved” to the minor to take a grant later when they are of age.
What happens if the minor attains 18 years before the estate is fully administered?
An application for a grant of double probate can be made, allowing the former minor to act as executor alongside the adult executor(s).
Who takes the grant when the minor is the only executor appointed by the will?
A grant of letters of administration with will annexed is made to the minor’s parent(s) or guardian(s) until the minor reaches 18 years.
What can the minor executor do once they turn 18 if the estate is still not fully administered?
The minor executor can apply for a cessate grant of probate to act as executor and complete the administration of the estate.
when there’s two executors and one in adult while the other is a minor what happens?
Adult will take the grant alone with power reserved to minor.
side:One executor can act even where there is an infant beneficiary.
When can executors renounce their role?
Executors can renounce only if they have not intermeddled in the estate (e.g., by selling the deceased’s chattels). i.e doing tasks a PR might do
What happens if an executor intermeddles in the estate?
The executor is considered to have accepted their appointment and must take the grant.
How must an executor formally renounce their role?
A: By completing and signing Form PA15 (witnessed) and filing it with HMCTS.
Do executors who are also trustees remain trustees after renouncing executorship?
Yes, they remain trustees unless they also disclaim the trusteeship.
What does “power reserved” mean in probate?
it allows an executor to delay acting without renouncing, reserving the right to take out a grant if needed later.
How many executors can be granted probate for the same property?
A: A maximum of four executors can be granted probate for the same property.
In what situation would “power reserved” apply to an executor? A
: If an executor, like Bella working abroad, does not want to act initially but wants the option to help later, “power reserved” can be applied.