When a person passes away, the process of managing their estate is called probate. Whether or not you must obtain a grant for transferring assets from the deceased to beneficiaries depends on numerous factors; including but not limited to asset value and type, who owns said assets, and if it was held jointly with another individual.
By acquiring the Grant of Probate or Letters of Administration (if there was no will), individuals can transition the legal ownership and responsibility for a deceased’s assets and estates to their personal representatives. These personal representatives are held accountable for ensuring that the decedent’s possessions are managed in accordance with either their last wishes, as revealed in any existing wills, or according to intestacy laws if they had not written one.
Even if probate is not necessary, a submission to HMRC may be needed as inheritance tax and probate examine different aspects.
When a person passes away, their assets must be transferred to the designated beneficiary or executor. Depending on the value of these assets and how they are held (i.e jointly owned), Probate may be needed in order for this transfer of wealth to take place properly and securely according to legal requirements. For example, if two people have shared ownership over an asset- it is highly likely that no probate will be required as only one surviving owner remains; likewise with bank accounts under certain limits – issue of death certificate, ID & will can enable funds release directly from the bank itself into rightful hands without needing further action through probation services.
Unsure of the best way to transfer assets? We’re here to help. Our team can provide you support in determining if a grant is required for successful asset-transfer benefitting your beneficiaries.
To ensure compliance with HMRC regulations, certain taxes and forms need to be taken care of.
Inheritance Tax
An individual’s inheritance may incur Inheritance Tax if it exceeds the value threshold or contained any taxable gifts given in the previous seven years. This tax needs to be settled within six months from death date while income taxation applies as normal up until that point – including a full personal allowance for one calendar year (if applicable).
Income Tax
Income received prior to the date of death must be subject to normal tax regulations with full personal allowance available for a complete year, all subsequent estate-sourced income will also incur taxation at basic rates. In order to ensure compliant filing, it is essential either formal annual returns are made or else informal reports of overall earnings over the period are submitted.
Beneficiaries can be rest assured that they need not worry about their tax affairs as we are on hand to help. We provide guidance around what must be reported, ensuring beneficiaries only pay the necessary amount of basic rate tax towards any income received.
Capital Gains Tax
CGT is an essential consideration for estates that sell assets. Taxable gains made beyond the estate’s 2-year annual exemption will be calculated and reported through either a tax return or informal procedure, commensurate with the value of the estate and associated taxes payable. We are available to advise personal representatives on how best to identify and capture any liable CGT liabilities due.
Stamp Duty
Inheritance of property typically does not incur Stamp Duty Land Tax. However, there are certain occasions when this may be required – and we’re here to help make sure you don’t run into any unexpected issues. Our team can ensure your transaction is carried out quickly, efficiently and compliantly by advising on potential tax implications down the line.
