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Probate & Estate Administration

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Case study: Grant of probate service (estate value £1.2m)

Key Facts

Rix & Kay Service: Grant only
Value of Estate: £1,200,000 (liable to Inheritance Tax)
Make up of Estate: Property, cash in bank & building society accounts, portfolio of investments, collection of antiques
Beneficiaries: Adult children

Background

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

Mrs F died in 2017 leaving a will which appointed her three children as executors and which distributed her estate equally between them.  Her husband had died many years before and left his entire estate to her.  Her assets comprised her house worth £650,000, a portfolio of investments held with the stockbroker worth £400,000, an extensive collection of antiques in her home and various National Savings accounts and building society accounts.  The total value of the net estate was just over £1.2m.

One of Mrs F’s children (Mr G) was recently retired and was able to devote time to dealing with the estate.  He was, however, concerned about the potential complexity of the Inheritance Tax position and wanted to ensure that the estate benefited fully from all available reliefs.

Outline of Rix & Kay’s service

It was agreed that Mr G would arrange for all the estate assets (the house, the investments and the bank accounts) to be valued and for all the organisations concerned to be notified of his mother’s death.  He also dealt with all the arrangements to stop her pensions and to liaise with her accountant over her final tax position.

Once he had done all this work, Mr G presented us with a full dossier of his mother’s assets with values and balances as at the date of her death.  We then drew up the probate papers on behalf of all three executors.  These incorporated the full HMRC account (IHT400) and also three claims for tax relief, i.e. those for the transferable nil rate band from her husband’s estate, the residence nil rate band for her estate and the residence nil rate band to be transferred from her husband’s estate.  Added to her own nil rate band, these reliefs gave a total amount deductible from the taxable value of the estate of £850,000.

This left a liability to Inheritance Tax of approximately £140,000 (without the claim for the three additional tax reliefs the Inheritance Tax liability would have been £210,000 higher) and we provided all the calculations for this.   We also liaised appropriately with Mrs F’s bank to arrange for the appropriate proportion of tax due on the application for the grant of probate to be paid to HMRC.  We supervised the signing of the probate papers by all three executors and filed them at the Probate Registry.

Following the issue of the grant of probate, we provided office copies to Mr G and he then opened an executors’ bank account and made arrangements to close the deceased’s bank and building society accounts.  He also liaised with the stockbrokers over the distribution of the portfolio to the beneficiaries and dealt with all remaining tax issues.

The three executors arranged for the distribution and sale of the collection of antiques and the clearance of their mother’s house.  Following that, the property was placed on the market and our Residential Property Team dealt with the conveyancing of that once a buyer was found and at a fee agreed with the executors.  Following the sale, our Residential Property Team transferred the balance of the proceeds to the executors’ bank account.

Timings

We obtained the grant of probate within three months of Mr G’s initial meeting with us.

Fees

Our fees and disbursements were as follows:

The executors decided not to incur the cost of the statutory advertisements as they felt that they were sufficiently aware of their mother’s financial circumstances to make that unnecessary.

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