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Administering Intestate Estate

Evening!  

An elderly relative died a couple of months ago, and I've offered to assist family members in administering the estate as while not a professional in this area in any way shape or form, I'm all for the challenge and am no stranger to filling in confusing paperwork. My view is see how far we get by ourselves, and get professionals to assist where required. There is IHT to pay and no will, so this may be more complicated than some, but from where we're at so far I think it's all achievable and the information is out there and on the guidance notes. 

…but would appreciate the hive mind of MSE forum goers validating our actions thus far, and advising on any bits that I may have missed as don't want to be hit by anything down the line that we should have picked up. 

Will
There is no will that we are aware of. We've contacted solicitors local to where the deceased would have lived when making any will with no results. We also conducted a "Certainty" Will Register search which took 56 days and expired last week with confirmation that nothing turned up. As part of this search a Section 27 notice was also placed. 

On this basis, we are now proceeding under the rules of intestacy. 

IHT
I have identified that we need to complete the IHT400 and associated schedules. As the estate will be over £1m, this can't be done online and the paper copies need to be completed and posted. I say paper, the latest electronic copies online are editable PDF's with some auto calculations which is a little easier to work with. 

The additional schedules:

  • IHT402 - We are claiming transferable NRB from the spouse of the deceased who left everything to her and therefore I believe we can claim this in full. Even though the NRB was £300k when he died, the paperwork suggests that we can claim £325k (the current rate). We obtained the Will & Grant of Probate through the Gov.uk search and have used the values from the grant in the IHT402. The will confirms that everything was passed to the recently deceased relative which will have left the NRB intact to be used here? 
  • IHT403 - Gifts - This is an interesting one and the one area we are (currently) seeking advice from the accountant as there were many gifts made over the years in the interest of tax efficiency and we need to ensure that these are listed correctly with the correct exemptions applied (lifetime gifts, gifts out of income etc) 
  • IHT405 - Houses - There are two properties, one we are listing as the residence of the deceased (albeit she was in a nursing home) and another which is rented out. We have obtained 1x RICS surveyor valuation on each property (rather than multiple EA appraisals - though this seems a point of debate on the forum as to which to do!) 
  • IHT406 - Bank accounts, as it says on the tin. Financial institutions have provided date of death statements for this. 
  • IHT407 - Possessions - We've created a spreadsheet of belongings, which don't total a great deal (under £1k) and totalled these in box 4. There is a jewellery collection, but the value is unknown. We are taking this to a local jeweller next week once they are open to have professional valuations on anything worth more than £1500 as these need to be listed separately (and just an idea of value for anything worth less to include in the total for box 4) 
  • IHT409 - Small pension which we've outlined here which seems straightforward 
  • IHT410 - This was something I wasn't 100% sure on. There is a Halifax PIP which at first I thought was an investment product which should go on IHT411, however the paperwork sent from Halifax Financial Services refers to "Life Assured" and says that as the policyholder is now deceased the plan is closed and the benefit paid to the estate. This makes it sound like a life assurance product that should be detailed in IHT410. Does anyone think otherwise? I don't believe this would alter the IHT payable. 
  • IHT411 - There are two investment products managed by the same financial planning firm. One is an investment account, the other a stocks and shared ISA. Both contain loads of different funds within their respective wrappers - i.e. "Allianz UK & European Investment Funds - Allianz Gilt Yield Fund", "Mellon Investments Funds ICVC - Newton Global Dynamic Bond Fund" etc etc. There are far more than space on IHT411, so I have given the headline valuations for the two products (GIA and ISA) on this schedule and included a copy of the financial planners date of death report. Is this acceptable? 
  • IHT421 - This appears to just be a summary that I fill in and post with all of the above, which they stamp and send back to me... Is that about right? 
I've omitted the schedules that don't appear to be relevant. There are no businesses, the beneficiaries as per the rules of intestacy are not direct descendants for the purpose of residence nil rate band so that doesn't count etc. 

Probate
This will be a "Grant of Administration" - I have prepared a PA1A (Probate Application - No Will) There are 4 equal beneficiaries (nieces and nephews), however we are listing the two that actively managed the affairs of the deceased (and did have Power of Attorney) to be issued the grant, with the other two obviously just included in the distribution of the estate when that occurs. I assume it's acceptable to do this and that all 4 don't need to be named on the grant? 

Am I right in thinking that we need to post the IHT paperwork off first, and then wait 15 days until we post the PA1A?

Paying the Tax
We have read that HMRC like "Some" IHT to be paid before the grant is issued, is this always the case? We aren't yet sure whether all of the institutions will support the direct payment scheme. I know we can defer payment of tax on the properties but paying tax on the cash & investments element up front might be interesting! Any knowledge/experience in this area is appreciated. 

Tax Returns
As I understand it, and the accountant will sort these for us, but 3 are required:
- Tax return for 2020-Feb 2021 (Death)
- Tax return for date of death to April 2021 Financial Year 
- Estate Tax return for current financial year 

If anyone spots any glaring omissions from what we've done so far then appreciative of the heads up but it *feels* like we're working along the right kind of track! 

Z.O

Replies

  • theoreticatheoretica Forumite
    8.4K Posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
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    If her spouse had a will my expectation would be that she had one prepared at the same time - does his will have contact details for the lawyer who drew it up? You have looked through her papers?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
  • ZingyOceanZingyOcean Forumite
    8 Posts
    First Post
    If her spouse had a will my expectation would be that she had one prepared at the same time - does his will have contact details for the lawyer who drew it up? You have looked through her papers?
    The spouses will was from the early 1960’s and did not contain details of the firm that drew it up. 
    And yes absolutely. Nothing was ever found unfortunately. 
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