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Executor – Step 2 – Inheritance tax.

As executor, you do not have to arrange the funeral, however, it is likely that you will be involved.  You need a green certificate to allow a funeral to go ahead.

When the registrar issues the death certificate, they will also hand over the green certificate.  You then pass on the green certificate to the funeral director.

Inheritance tax

The next task as executor is to sort out Inheritance Tax.  You have to do this before you can start to apply for a ‘Probate’ and sort out their property, money and things they own.

You need to work out if there is Inheritance Tax to pay.

The gov.uk has useful guidance for this – click here.

You need to complete three tasks when you value the estate.

  1. Contact organisation about assets and debts.  Organisations may include banks, employers, credit card companies, landlord, pension provider etc.
  2. Estimate the estate’s value.
  3. Report the value to HMRC.

Valuing the estate is a big job and it can take 6 to 9 months, or even longer.

The Money Advice Service has plenty of helpful advice about Inheritance Tax.  Click here.

Even if there is no inheritance tax to pay, you must still report the estate to HMRC. You can do this online at GOV.UK  

Citizens’ Advice says the executor should send a copy of the death certificate to the organisations that hold the money of the person who has died. The executor should ask them for confirmation of the value of the money held at the date of death and the amount of income received during the tax year up to the date of death. They should also ask them to freeze the bank accounts so no one can take money out without the correct legal authority

Deadlines

If the estate does owe Inheritance Tax, you need to

Then you can apply for probate.
If there is inheritance tax owing, you have to pay some of it before you can apply for probate.
You may well be able to ask the deceased’s bank or building society to pay the inheritance tax directly from their bank account under the direct payment scheme.

  Plan ahead

  1. Can you name all the bank accounts, credit cards, savings schemes, shares, loans and mortgages that the person who has named you as executor has?
  2. Would you know how to go about finding this information once the will writer has died?
  3. Can you arrange to see the will writer soon, to start finding this out?

Meanings of words used in this blog

Estate = property, money and things the deceased person owned.

Executor = is a person who is named as someone who can deal with the estate of a deceased person.

HMRC = HM Revenue & Customs (aka the tax office) Click Here.

Probate = the document granted to an executor that gives them the right to carry out the wishes stated on a will.

  NB The information in this blog is not legal guidance.  It is information I have found while researching while compiling a handbook called ‘To My Executor’. It applies to England and Wales.

 

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