Conflict of interest query

maximumgardener

Thanks to all.
comments all very much appreciated

MG

maximumgardener

getmore4less wrote: »

What sort of business, sole trader, ltd, other.....

yes . my brother was a sole trader (with 2 employees).
ran payroll and paye/nic for them......his estate still does this.

added monies for ex partner are paid via his estate account in cash ....300 per week
no NIC or payroll involved but claimed to be a salary authorised by executors (for an executor)

Yorkshireman99

maximumgardener wrote: »

yes . my brother was a sole trader (with 2 employees).
ran payroll and paye/nic for them......his estate still does this.

added monies for ex partner are paid via his estate account in cash ....300 per week
no NIC or payroll involved but claimed to be a salary authorised by executors (for an executor)

The auditors are going to want to know what the justification is for the payments. From what you have said there is no legitimate reason for the business, or the estate to pay anything. In the latter case there could, at a stretch, be a case for this being an advance on the inheritance. If HMR&C decide to investigate then it will not look good to say the least.

getmore4less

maximumgardener wrote: »

yes . my brother was a sole trader (with 2 employees).
ran payroll and paye/nic for them......his estate still does this.

added monies for ex partner are paid via his estate account in cash ....300 per week
no NIC or payroll involved but claimed to be a salary authorised by executors (for an executor)

google running a sole traders business on death and research much more than you have and get advice

Malthusian

Yorkshireman99 wrote: »

If HMR&C decide to investigate then it will not look good to say the least.

Yes, we've skipped over that point so far. By drawing a salary from the estate she could well be getting money tax-free (it doesn't sound as if the partner is going to be over the threshold for income tax or NICs) which would otherwise be subject to Inheritance Tax at 40%. It doesn't look very good, especially if she is "not doing very much" as OP says.

I believe there is nothing wrong in itself with employing a spouse to look after the business of the deceased, just as there would have been nothing wrong if he'd employed her in life to maximise her tax allowances - if she's doing actual work and being paid at a commercial rate. The former is apparently not true and the latter may not be true either if she's not doing much. £300 a week is £15,000 a year which is reasonable for admin staff, but only if they're working full time.

maximumgardener

Malthusian wrote: »

Yes, we've skipped over that point so far. By drawing a salary from the estate she could well be getting money tax-free (it doesn't sound as if the partner is going to be over the threshold for income tax or NICs) which would otherwise be subject to Inheritance Tax at 40%. It doesn't look very good, especially if she is "not doing very much" as OP says.

I believe there is nothing wrong in itself with employing a spouse to look after the business of the deceased, just as there would have been nothing wrong if he'd employed her in life to maximise her tax allowances - if she's doing actual work and being paid at a commercial rate. The former is apparently not true and the latter may not be true either if she's not doing much. £300 a week is £15,000 a year which is reasonable for admin staff, but only if they're working full time.

absolutely right. The overriding thing is, an executors duty and tasks are largely "administrative" and lay executors are unpaid....so hence the thought this payment is a "conflict of interest" . the justification for the paid role is very dubious we believe. also there are 3 other executors . they are unpaid and of equal status in executry terms. I think the next stage will be a letter to the solicitors seeking more clarification on the exact nature of the position. T's and C's. employed or self employed. tax office informed etc ?? also are all 4 executors in full agreement with the position ? does the one holding the position have a vote as they have a vested interest ?
the claimed business involvement by his ex partner was never needed or operated when my brother was alive. he was careful to avoid that.