'Estate Fully Administered'

getmore4less

https://www.google.co.uk/?gws_rd=ssl#q=HMRC+fully+administered


http://www.hmrc.gov.uk/manuals/tsemmanual/tsemglossary.htm

Administration period

TSEM3240, TSEM6050, TSEM6100, TSEM6520

This is the period during which the personal representatives of a deceased are administering the estate. It starts the day following the date of death. It usually ceases when the personal representatives have ‘ascertained the residue of the estate’. Until then, the personal representatives cannot assent to the residuary beneficiary’s title.

Although the exact date is a matter of fact, it can be difficult to determine. Case law shows that agreeing the date can be controversial. The administration period can end before all the assets have passed out of the hands of the personal representatives. It can end when the personal representatives are ready to transfer the assets. They may continue to hold the assets as trustees, rather than personal representatives

DCF_Evaluator

getmore4less

Many thanks. All of assets have now been distributed in this case so under the above definitions I would define the estate as reasonably 'fully administered'.

However ...! ... the estate earned a small amount of interest on bank accounts while these were still in the estate and I understand that estates, although they have a CGT allowance (at least for up to 3 tax years), don't have a personal allowance vs income tax so technically income tax is due, presumably at 20%. And nothing (yet) has been done about this. So, on this basis it's technically not fully administered ..?

Incidentally, it would be useful to 'tie up loose ends' through producing a set of estate accounts now (would also deal with above income tax); I would be grateful to learn, if anyone knows:

- are estate accounts mandatory or a nice to have?
- is it the case for many 'DIY executors' of waiting until HMRC asks for same?
- if mandatory is a formal form with I&E account and opening and closing balance sheet is needed?
- if it has taken (say) 3 years since date of death to get to a 'fully administered' point, whether we need accounts for each tax year or just for a 3-year accounting period

As for the original comment from the solicitor that provoked this thread that he 'understood the estate was fully administered' ... it would be possible to go back and have this clarified but without the going into details it would cost someone time and money and more disputes so sorry to say probably not worth it.

getmore4less

Income during administration gets taxed as a trust, and the beneficiaries get a tax credit when any(not just the income) distribution is done.

Check with HMRC what they want, I did across tax years with a letter with a table of income and where it came from and HMRC were happy to issue a refund(upto DOD) and a demand(two tax years) based on that. forget the amounts low £100s
Most accounts pay tax anyway so it may be neutral unless there are 40% taxpayer beneficiaries.

Estate inventory and account is optional but pretty much essential as this is the record of what came in and where it went so needs to be done anyway.

No official body normaly asks for it, HMRC use IHT forms for their bit and other tax forms for the income/trust bits(they don't care where it goes), anyone can ask for a copy of an I&A through a court order(if granted by the courts) so a good idea to have them as creating them from old records in a couple of years could be a nightmare.
Don't have to be fancy(best they add up).

Usual to give a copy of the I&A to residual benificiaries, and anyone with a potentialy variable amount, fixed legacies don't need it as long as they get their gift.