Wills and Estate Administration - Pre-Grant Procedure, Applying to the Court, Dealing with HMRC

Question 1

Ways to pay IHT liability

Answer 1

PRs must have paid IHT due on the estate but assets may need to be sold in order to pay this - however, PRs cannot sell (most) assets without a grant of probate

• Ask deceased bank who may pay money directly to HMRC
• Potential PR can seek a loan from bank or beneficiary
• Using life assurance policy proceeds
• Sell estate assets (which can be sold without a grant)

In exceptional cases HMRC may allow the grant to be obtained on credit

Question 2

Applying for a Grant

Answer 2

• Complete the appropriate form (depending on type of grant)
• Supported by will plus two copies
• Official copy of death certificate
• Further supporting documents
• Tax form indicating the estate likely owes no tax or indicating amount of tax paid
• Payment for probate fees

Question 3

Paying IHT in instalments

Answer 3

No tax due until the expiry of 6 months from the end of the month in which the deceased died (after this interest will start being charged)

Question 4

Further evidence for grant

Answer 4

• Evidence of due execution if attestation clause absent or does not cover particular circumstances
• Affidavit confirming deceased’s full name and explaining that they signed the will in a shorter name
• Affidavit of knowledge and approval of will’s contents (e.g. if testator was blind)
• Affidavit confirming timing of alterations
• Documents referred to in will
• Affidavit of plight and condition (e.g. if staple marks can be seen which indicate will may have been tampered with)

Court will accept statements of truth in place of affidavit

Question 5

Caveats

Answer 5

• Prevents issue of grant of representation
• Valid for up to six months

Question 6

Citation

Answer 6

Citation to take probate

• May be used when executor has lost right to renounce probate due to intermeddling in estate
• Once executor is cited they must proceed with an application for a grant of probate
• If they don’t the citor can apply for an order allowing executor to be passed over which will allow citor to apply for a grant of letters of administration with will annexed

Citation to accept or refuse grant

• Used to clear off a person with higher right who has not applied or shown any intention to apply
• Citor can ask court to cite that person
• If the person cited does not apply after being cited the citor may apply themselves for a grant
• Often easier to apply for an order passing over

Question 7

Inheritance Tax

Answer 7

PRs have to deliver account to HMRC within 12 months from the end of the month of deceased’s death

IHT form and payment sent to HMRC who then send a receipt to HMCTS Probate

Interest runs from 6 months

PRs cannot apply for grant until IHT paid

Excepted estate

• If no IHT due and formal account not needed (unless HMRC request one)

Question 8

Transferable Nil Rate Band

Answer 8

• Concerns estate of someone who had a deceased spouse or civil partner
• Pre-deceased spouse must not have used all of their nil rate band when they died (e.g. because they left most or all of their estate to their spouse because transfers between spouses are exempt from IHT OR because spouse’s estate worth less than threshold)
• Unused nil rate band is transferrable to spouse increasing the IHT threshold
• If nil rate band different at time of pre-deceased’s death we still use the current nil rate band at the time of the surviving spouse’s death when working out how much to transfer

Question 9

Small estate

Answer 9

Estates that do not exceed IHT threshold

Question 10

Exempt estate

Answer 10

Estates that do not exceed £3m and the net chargeable estate does not exceed the IHT threshold