Probate and Estate Administration
At Jackson Longe Solicitors, we understand not only the legal challenges but also the emotional challenges of dealing with the death of a loved one.
We are here to help with every step of the way from obtaining Grant of Representation to dealing with complicated tax issues and financial matters.
Obtaining a “Grant” to administer a deceased estate can often be more complicated than imagined. The timescale to obtain the Grant is typically between 4-16 weeks but this very much depends on the complexity of the estate. It could certainly take much longer if there any “contentious” factors. Please see our page on Contentious Probate matters.
Administration of the Estate
Obtaining a grant will enable one to administer the deceased’s estate and this will typically take 3-12 months to complete, although interim distributions of legacies can often be made. Again in the event of family disputes, the undue delay may emerge and so it is always advisable to obtain independent legal advice when dealing with an estate in order to deal with and circumvent any foreseen contentious issues.
Varying the Will
In addition to the routine administration, families may also wish to consider “varying” the terms of the Will itself within 2 years of the death. Careful and professional advice will be needed.
Inheritance Tax (IHT) is erroneously believed to only affect the wealthy. It is a misconception and in fact, most property owners (in particular) will inevitably find themselves within its ambit.
IHT is paid on your estate when you die as well as also when money is transferred into certain trust funds. The current threshold for IHT purpose (at 2014/15 rates) is £325,000 and so the first £325,000 of the estate is exempt from IHT. This is called the nil rate band. The assets in the estate are valued on death, the nil rate band subtracted and the remainder of the estate is taxed at 40%. Chargeable lifetime transfers are taxed at 20 per cent. Transfers made within the seven years preceding the death may be clawed back into the value of the estate for IHT purposes and are charged at 40%.
Married couples and civil partners will however benefit from double the threshold if one spouse transfers part of their estate to the surviving spouse or civil partner. The estate transferred to the surviving spouse is “tax-free” so that the percentage of the ‘tax-free’ transfer is calculated and the remaining percentage is then used to uplift the tax-free amount allowed on the death of the second spouse or civil partner. This is known as a transferable nil rate band and how it works is rather complex.
It is always best advised to seek legal guidance to ensure the maximisation of the exemptions, allowances and other mitigating benefits that can be enjoyed as regards IHT.
Income Tax and Capital Gains Tax
The Personal Representatives of a deceased estate, whether they are Executors appointed under the terms of the Will or Administrators appointed to act where there has been no Will drawn up, may be faced with dealing with income tax and capital gains tax pre and post-death.
In the course of administering an estate, it may be necessary to sell some or all of the deceased’s assets which may in turn trigger capital gains tax in the event of gains made in excess of the Annual Exemption (or there may even be capital losses arising from the tax year preceding death which exceed the gains made during this period which can be carried back and set against the gains made by the deceased in the three years preceding the year of death).
Gains in excess of the Annual Exemption are taxed at varying rates i.e. 18% or 28% depending on the date of disposal.
It is the responsibility of the personal representative to file the necessary returns and addresses the tax consequences properly to ensure the full settlement of such liability (and where possible take full advantage of the allowances to reduce such liability).
Our solicitors are skilled to offer legal advice pertaining to your individual circumstances.
Call us between 9:30AM-5.30PM on 0208 332 2069 or fill out the form.
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