Our team of lawyers has many years of experience in dealing with the administration of clients’ estates, many of which are complex. Our staff are adept at providing a professional service to families and executors in a sympathetic and understanding manner.
Probate is a term commonly used to describe the process of dealing with the affairs of someone who has died. That person’s estate (money, property and possessions) will need to be collected in, then debts (mortgage, outstanding bills and loans), and any Inheritance Tax must be paid. The remainder of the estate can then be distributed to those people entitled. In order to obtain the authority to carry out this work, it is usually necessary to apply for a legal document called a Grant of Representation.
One of three types of Grant of Representation will be issued, depending on the circumstances;
Grant of Probate: issued to one or more Executor named in a valid will, if there is one.
Letters of Administration (with Will): issued where there is a will but either no Executor is named or none can/will act.
Letters of Administration: issued when there is no will, or the will is invalid (known as being ‘intestate,’ explained below).
This process can either be straightforward or complicated, depending on the assets in the estate, the provisions of any will, and family circumstances.
Before a Grant of Representation can be issued, an Inland Revenue Account will need to be completed and filed. This must identify all assets and debts of the estate and include valuations as at the date of death. Depending on the value of the assets and the identity of intended beneficiaries it may also be necessary to pay some of the Inheritance Tax for which the estate is liable before making the application for the Grant of Representation.
After completion of the Inland Revenue Account the Executors or Administrators must submit an Oath to one of the Probate Registries of the High Court, which confirms their entitlement to take out the Grant and declares responsibility for the distribution of the estate.
When the Grant of Representation has been issued it will then be possible to close the accounts and investments and arrange the sale of any property. The funds must then be placed on an Executor’s account to settle the debts and any remaining Inheritance Tax and then to distribute the estate in accordance with the terms of any will or the beneficiaries entitled if there is no will.
It is possible that a bank will close an account to an Executor/Administrator or next of kin without the requirement for a Grant of Representation. This will normally only apply if there is only a small amount in the account (£5,000 as a general rule, but each financial institution has their own limit), the estate is under £15,000 in total and there is no requirement to obtain a Grant of Representation for any other asset.
Even if a bank will not close an account without a Grant of Representation, they will normally be happy to arrange settlement of any Inheritance Tax payable and funeral expenses before it is available, so long as there are sufficient funds in the account.
Under the Administration of Estates (Small Payments) Act 1965, if the estate is worth less than £5,000 it can be distributed without proof of formal title. Therefore if the total value of everything owned by the deceased in their sole name is less than £5,000, you do not normally need to apply for probate.
Banks and building societies will often release small amounts of money on receipt of a Registrar’s death certificate. They may also ask you to sign a statutory declaration form to confirm you will be distributing the estate in accordance with the Will or intestacy rules. You may be asked to do this in the presence of a solicitor who is also a Commissioner of Oaths. Bank and building society accounts in joint names can usually be transferred to the surviving holder without probate. If the deceased owned property or money in joint names, please see chapter five.
There are also some assets which can normally be claimed without the need for probate. For example, life insurance policies in trust, pension benefits and nominated property.
HM Revenue and Customs may ask to see a set of accounts, so you must keep the original Will and all records.
When someone dies, their estate will normally have to pay any tax due before any money is distributed to their heirs. Usually when you inherit something, there is no tax to pay immediately but you might have to pay tax later on.
Inheritance Tax is paid out of the deceased’s estate before it’s distributed to the heirs.
The personal representative or administrator of the estate is normally responsible for working out how much Inheritance Tax is due. They’re also responsible for ensuring that this is paid from money in the estate, or from the sale of assets.
The tax is usually paid within six months’ of the person’s death. If it’s not paid within six months, HMRC starts charging interest.
Inheritance Tax is due on estates worth more than £325,000. The rate is 40% of the estate that is above this threshold.
An heir will normally not have to pay any tax before they receive your inheritance. The exception is if you received a gift at some point in the seven years before the person died. Depending on the value of the gift and when it was given, you might have to pay some tax.
Any income received after the person’s death, such as rent from a property or income from the person’s business, ‘belongs’ to their estate. This also includes Income from UK or foreign savings, investments or property rent
For this type of income, the executor must report this to HMRC as part of probate, so that appropriate amount of tax is calculated and paid by the estate.
The estate doesn’t have to pay any Capital Gains Tax on the property or assets that weren’t sold (also known as ‘unrealised gains’) before the person died.
But, if the property or asset is sold during probate and its value rose since the person died, there is usually Capital Gains Tax to pay.
Probate applications or the estate administration process do not need to be complicated. Our pragmatic approach allows us to work efficiently, enabling us to provide a high quality service, while at the same time ensuring that we keep costs to a minimum for our clients.
We work on a fixed fee basis for all probate and estate administration matters. Our probate fees begin at £895 and the fixed fee will depend on the required amount of work.
Our transparent approach guarantees that you have the peace of mind that your matter is in expert hands, and that there will be no hidden charges along the way.
We have specialists in domestic and international probate law. Our experts understand every element of the probate process, meaning we can advise our clients on what to expect from the outset, provide realistic time frames for completion and regular updates throughout.
Our knowledge and experience eliminates the need for you to outsource any work related to the probate of an estate, such as tax settlements, trust creation and inheritance distribution. This sets us apart and will keep costs down.
The department is known for a very strong client service ethic and a high proportion of new clients come through recommendation. Client appointments are accommodated outside traditional office hours and home visits can be arranged on request.
Call us today on 020 7157 9981 for a free consultation to discuss your circumstances and you will speak to an expert who will provide you with a fixed fee quote.