Estate Administration

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In the event of death of an individual you must notify HMRC of the death by providing HMRC with a copy of the death certificate.

The executors or the persons legally responsible for administrating the estate must apply for “probate” or “letters of administration” to enable the estate to be dealt with.

This will be decided upon whether the deceased passed with or without a last will and testament.

Inheritance Tax is due on the value of the deceased estate which will include assets including property, money and possessions.

Inheritance Tax will not normally be payable if either:

  • the value of the estate is below the £325,000 threshold.
  • you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club.

If the estate’s value is below the threshold you will still need to report to HMRC.

FAQs

Once you have the value of the deceased estate you can either report to HMRC by preparing manual submissions or you can lodge electronically via the HMRC website.

If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000.

If you are married or in a civil partnership and the estate is worth less than the threshold, any unused threshold can be added to your partner’s threshold when you passed. This means their threshold can be as much as £1 million.

There is usually no Inheritance Tax to pay on small gifts you make out of your normal income, such as Christmas or birthday presents. These are known as ‘exempted gifts’ which have a limit of £3,000 each tax year or £6,000 if no gifts made in the previous year.

There is also no Inheritance Tax to pay on gifts between spouses or civil partners. You can give them as much as you like during your lifetime, as long as they live in the UK permanently.

If you passed within 7 years of making gifts

If you passed within 7 years of giving away all or part of your property, your home will be treated as a gift and the 7 year rule applies.

Gifts made in the first 3 years would be liable to Inheritance Tax. Gifts made 3 to 7 years before your death are taxed on a sliding scale known which is referred to as ‘taper relief’.

The standard Inheritance Tax rate is 40% and it is only charged on the part of the estate above the threshold.

Get in touch

We at GM Tax provide fixed fee quotes for advisory work and tax returns.

If you are the executor of a deceased estate and require assistance with the preparation and submission of forms to HMRC and agreeing the valuation of the estate along with computing the inheritance tax payable please complete our online enquiry via our contact us button or by calling a GM Tax office closest to you.

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GM Tax Also Offers The Following Services:

  • Review of a deceased estate and the assets held considering reliefs available to calculate the Inheritance Tax payable.
  • Review your UK domicile and residency.
  • Consider the tax impact of distributions made to both UK & Non UK Tax residents.
  • IHT planning in the context of assets retained or sold by the estate.
  • GM Tax Also Offers The Following Services:
  • Review of a deceased estate and the assets held considering reliefs available to calculate the Inheritance Tax payable.
  • Review your UK domicile and residency.
  • Consider the tax impact of distributions made to both UK & Non UK Tax residents.
  • IHT planning in the context of assets retained or sold by the estate.

Book a consultation

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Contact Us