Probate granted very quickly - now next steps...

Famau

Applied for probate on 22 May, and granted today after just under 2 weeks.  A very simple excepted estate (using transfer of nil rate band from a spouse), but nonetheless very impressed by the speed and relieved that I evidently hadn't got anything wrong.

A couple of questions re my interpretation of the the next steps please:

1) As I used Tell Us Once I understand that HMRC will calculate any income tax due to the point of death (29 April).  I assume this will cover tax year 23-24, and also interest accrued from 5 April this year to 29th.  I assume this will include accrued interest to 29 April from fixed rate accounts that mature later in the year.  Is this correct?  And can I rely on HMRC to get this right as presumably they have all the information and just crank a handle, or do I need to minutely examine their calculations...?

2) I understand that I also then have to report to HMRC the total interest from 29 April to account closures.  Presumably I simply subtract the account balances with accrued interest on 29 April from the final closure figures, tally the totals and send them in a letter to HMRC.  Again is it that simple??

Thanks for any clarification.  I've found the answers on here to be really helpful as I navigate the probate process.  Special mention to Keep-pedalling who seems to be the font of knowledge on this area !

Shedman

Famau said:

Applied for probate on 22 May, and granted today after just under 2 weeks.  A very simple excepted estate (using transfer of nil rate band from a spouse), but nonetheless very impressed by the speed and relieved that I evidently hadn't got anything wrong.

A couple of questions re my interpretation of the the next steps please:

1) As I used Tell Us Once I understand that HMRC will calculate any income tax due to the point of death (29 April).  I assume this will cover tax year 23-24, and also interest accrued from 5 April this year to 29th.  I assume this will include accrued interest to 29 April from fixed rate accounts that mature later in the year.  Is this correct?  And can I rely on HMRC to get this right as presumably they have all the information and just crank a handle, or do I need to minutely examine their calculations...?

2) I understand that I also then have to report to HMRC the total interest from 29 April to account closures.  Presumably I simply subtract the account balances with accrued interest on 29 April from the final closure figures, tally the totals and send them in a letter to HMRC.  Again is it that simple??

Thanks for any clarification.  I've found the answers on here to be really helpful as I navigate the probate process.  Special mention to Keep-pedalling who seems to be the font of knowledge on this area !

Congrats on getting probate granted so quickly....fingers crossed the one I submitted a few days after you and also an excepted estate with transfer of spousal NRB goes through as quickly.

In a similar situation re interest on fixed rate savings accounts and like you initially thought that the accrued interest to date of death would be to the tax account of the deceased and, as they died in mid April, then there would be no tax to pay as they would have virtually all their Personal Allowance etc to set the interest against.  

However, having done some research HMRC treat the interest as being taxable when paid or applied/credited so unless the accrued interest has actually been applied/credited to the bank account at date of death (and that doesn't seem to happen as banks seem only to apply the interest on these longer term fixed rate accounts at date of closure which if probate is required is going to be later than date of death) then any tax falls to the estate/personal representative.

As the estate/personal representative has no tax allowances then 20% tax is payable on all the interest credited.  

In our case with a mix of 1,2 and 3 year fixed accounts that pay interest on maturity or closure and have been running for some time it's going to cost the estate around £2,000 in tax (vs nothing if it had been to the account of deceased)

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem7262

Shedman

Also don't forget you will need to issue form R185 to the beneficiaries detailing their share of the income received by the estate (eg interest) and the tax paid on it as their share of post death estate income forms part of the beneficiaries taxable income but they can offset the tax already paid by the estate so for a basic rate taxpayer no further tax should be payable and a non tax payer can reclaim the tax paid.

https://www.gov.uk/government/publications/trusts-and-estates-statement-of-income-from-estates-r185-estate-income

Famau

Thanks for that Shedman. We are in a very similar position re probate and fixed accounts it seems!  I will probably owe a similar amount of estate tax.   Hopefully you'll get a speedy response too (I assume that like me you applied online). 

I'll have to try to disentangle the interest received in each account, see when it was nominally received and then work out what HMRC charge in income tax just to be sure that we don't effectively pay tax twice (once via income tax and then again as part of tax on interest to the estate).  I'll do a bit more digging - I'd have thought HMRC would have a simple guide to what must be a common issue but maybe I expect too much....

Cazzaloulou68

@Famau can i ask, did you get an email stating they had received documents? Or just the email to say probate granted? I applied on 24May online, so hoping it will be a quick one ☝️ 

Famau

Cazzaloulou68 said:

@Famau can i ask, did you get an email stating they had received documents? Or just the email to say probate granted? I applied on 24May online, so hoping it will be a quick one ☝️ 

Hi cazzaloulou - yes, I received an email confirming receipt of documents.  That arrived 7 days after my online application - so hopefully yours will be here about now.  The email confirming grant arrived 6 days afer that.

Cazzaloulou68

@Famau sadly nothing yet….be just my luck to be the one that takes forever. Royal Mail delivered docs on 28May, i await with baited breath my confirmation email.

Cazzaloulou68

@Shedman we seemed to have applied at the same time, please post when you’ve received any information.

CalicoB

Sent online application on 23rd May, and posted will the day after. The delivery of the will was signed for on 28th May (bank hol weekend). I just got the email today to confirm receipt, 9 working days after submitting online. 

Famau

Update - probate certificates arrived today, just a day or so after the email confimring it had been granted.  Very impressed.  Start to finish from their receiving the Master Will via post was exactly 2 weeks ! 

Shedman

Well I wasn't expecting that on a Saturday afternoon.   Just had the email from HMCTS to say that probate has been granted.  The online tracker never moved from Documents Received (and I checked yesterday evening) so not sure what use it actually is.  Still this is really good news.

My timeline was:

19 May Probate applied for online (this was actually earlier than I indicated above as I hadn't actually checked date when I responded to Famau)
20 May Docs sent Special Delivery and were signed for on 21 May
31 May Email saying Documents Received and tracker updated to show this
08 Jun  Email stating Probate Granted

so less than 3 weeks (and including a Bank Holiday).