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Case study: Full probate administration (estate value in excess of £800k)

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Key Facts

Rix & Kay Service: Full probate administration
Value of Estate: in excess of £800,000 (liable to Inheritance Tax)
Make up of Estate: Property, cash in bank and building society accounts, portfolio of investments, an asset qualifying for business property relief, trust fund
Beneficiaries: Adult nephew & niece, 15 named friends and family

Background

(In this example we have changed some details to protect confidentiality)

Mr H died in 2016.  His wife had died before him and he did not leave any children.  He left a will making his nephew and niece the principal beneficiaries of his estate and included legacies of cash sums to 15 friends and members of his family.

His house which was worth in the region of £750,000.  He had an extensive portfolio of investments which were registered in his own name.  He did not use the services of a stockbroker and the share certificates were in various folders around his house.  Mr H also had a significant holding (worth approximately £120,000) in an unlisted investment which he had purchased to qualify for the Inheritance Tax business property relief.  There were also several bank and building society accounts.  While at one time he had clearly been very organised, old age and infirmity had meant that his financial affairs were in something of a muddle.

Under the will of his late father, he had been given a life interest in another portfolio of investments which were registered in his sole name, his co-trustee being his sister, who had died some years before him.

Outline of Rix & Kay’s service

His nephew and niece were appointed as executors of his will but as both lived and worked abroad they were unable to deal with the administration of the estate.  They organised the funeral and visited the UK for the purpose of attending that and met with us to discuss the estate on that visit.  Thereafter, they returned home leaving us with instructions to handle the whole of the estate on their behalf.

We tackled the estate by attending the deceased’s property and made a thorough search for all paperwork in relation to his financial arrangements.  We then arranged for his portfolio of stocks and shares to be valued and spent some considerable time working out which holdings belonged to him personally and which were comprised in the trust fund.  We organised valuers to value the contents of his house and the house itself.  We also wrote to all the asset holders and obtained details of the balances on his accounts.

We instructed specialist advisers to advise about the unlisted shares and established that they would qualify for the Inheritance Tax business property relief.  We also found among Mr H’s papers the details of his father’s will trust which provided for this fund to pass on his death to the nephew and niece who benefited from this free estate.

Having eventually obtained collated full information about his estate, we prepared the papers to apply for probate of his will.  These included the claim to transfer the balance of his late wife’s Inheritance Tax nil rate band to his estate and also the claim for business property relief in relation to the unlisted shares thus saving the estate £178,000.   Additional HMRC paperwork had to be prepared in relation to his interest in the trust once the shares within that fund had been identified and valued.

The total Inheritance Tax of liability amounted to just over £320,000 (without claiming the additional nil rate band and business property relief it would have been £498,000).  We made arrangements with Mr H’s bank to pay the appropriate proportion of tax due on the application for the grant of probate to be paid to HMRC.  We despatched the probate papers to the executors for signature and return to us and filed them at the Probate Registry.

Following the issue of the grant of probate, we consulted with the beneficiaries over the investments and they indicated that they wished to receive their inheritance in the form of cash.  As the beneficiaries were non resident for Capital Gains Tax purposes we took steps to allocate shares to them in kind before sale to avoid a Capital Gains Tax charge on  the sales.  Stockbrokers were then instructed to arrange the sales.

Having obtained clearance from HMRC in relation to the Inheritance Tax position and having dealt with a number of queries raised by them in relation to the business property relief for the unlisted shares we produced detailed estate accounts showing the disposal of all the investments and the other assets and all the income that had arisen during the course of the administration.  We also liaised with accountants over settling the deceased’s tax position and completed arrangements to close the trust fund with HMRC.

We also arranged the clearance of the house and put the house on the market with local estate agents.  As it was in a dilapidated condition, it took some time to find a buyer and there were a number of abortive sales.  Eventually a reasonable price was obtained and the executors instructed our Residential Property Team to deal with the conveyancing work.

We spent some time tracking down the individuals who had been left cash legacies by the deceased, some of whom had predeceased him.  As the will had been made many years ago a number of the addresses were out of date and we instructed one of our tracing contacts to find the missing individuals which he was able to do at reasonable cost.  The balance of the estate was then distributed to the nephew and niece.

Timings

We applied for the grant within five months of the initial meeting and completed the administration within seven months of obtaining the grant.  Therefore, from the initial meeting, the entire process took approximately twelve months.

Fees

Our fees and disbursements were as follows:

 

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