Scenario 1 – Fee £2,250 plus VAT £2,700 gross
Background
In this scenario, we were instructed by a lady whose mother had recently died.
There was a Will, which was not being contested.
There was a full consultation between the client and one of the Probate team and she was advised of the Probate process.
On speaking with the client, we established the estate comprised of a property, jewellery, cash at bank and premium bonds. The daughter had arranged for valuations of all of the assets. The total value of the estate was £530,000, which is over the Inheritance Tax threshold.
The client was happy to value the assets and did not need for us to be involved with distributing the estate.
What we agreed to do and be responsible for
We reviewed the Will and advised that by utilising the relevant spousal exemptions there would be no Inheritance Tax to pay. We also prepared the relevant Inheritance Tax Returns based on the information provided by the client.
There were no queries raised by HMRC and therefore the application for Probate was submitted and issued within five months of death, allowing the client to transfer the assets into her name.
Scenario 2 – Fee £5,200 plus VAT £6,240 gross
Background
Mrs W died in April 2020, leaving two adult children.
Mrs W had left a valid Will with her estate to be split evenly between her two adult children who were also named as the executors.
A member of the Probate team met with Mr W (son) to discuss his late mother’s estate, both whom had been longstanding clients of the firm. They discussed the steps required in order to obtain the Grant, and which of those steps he felt able to do and which he would like us to do on their behalf.
It was established that Mrs W’s assets were some bank accounts with Lloyds, an ISA with Lloyds and three rental properties. It then transpired that two property gifts had been made in the seven years prior to death which also needed to be included within the estate, as well as some liabilities to settle. We also concluded the personal tax position for Mrs W to death to ensure the tax liability was included within the estate value.
The client did not want to be too involved in the probate process and it was agreed that we would undertake most of the administrative duties including dealing with the Inheritance Tax returns, making the application for probate, paying the creditors and distributing funds to the beneficiaries.
What we agreed to do and be responsible for
Valuations were required in respect of the three rental properties, as well as historic valuations for the properties at the date of gifting. We clarified closing balances and accrued income on bank held balances and final estate liabilities and cost allowance, making due allowance for the time that had passed on the gifts made in the year’s prior to death in order to correctly value the estate for tax purposes.
We completed the Inheritance Tax forms within the prescribed time scale and due to the beneficiaries wanting to retain the properties short term, we agreed settlement for the Inheritance Tax due on the liquid estate assets and a 10 year payment plan arrangement attached to the property. We arranged direct payment of the Inheritance Tax from the bank accounts held by Mrs W with Lloyds via form IHT423.
Once the tax position was finalised with no queries from HMRC, we applied for and received the Grant of Probate.
Subsequently once Probate was obtained and one of the properties was sold, we arrange final settlement of the previously agreed 10 year payment arrangement.
We effected the transfer of the three properties into the beneficiaries names at the Land Registry, settled outstanding liabilities with estate creditors and arranged distribution of the estate to the beneficiaries, after making due allowance for funeral costs already paid by one beneficiary solely.
Scenario 3 – Fee £6,000 plus VAT £7,200 gross
Background
Mr C died in December 2019, leaving three adult children and a widow.
Mr C had left a valid Will with legacies to his children and siblings and the residual estate to his widow who was also named as the executor.
A member of the Probate team met with Mrs C and they discussed the steps required in order to obtain the Grant, and which of those steps she felt able to do and which she would like us to do on her behalf.
It was established that Mr C’s assets were a half share in the matrimonial home, funds in various bank accounts, shares in a limited company which was in liquidation and jewellery. He had also made a gift of a property to his wife shortly prior to his death.
The client did not want to be involved too involved in the probate process and it was agreed that we would undertake most of the administrative duties including dealing with the Inheritance Tax returns, making the application for Probate, paying the creditors and distributing funds to the beneficiaries.
What we agreed to do and be responsible for
A valuation was required in respect of the jointly owned property, which although held as joint tenants and therefore legally transferred to Mrs C on the death of her husband, it still had to be included in the value of the estate for Inheritance Tax purposes.
We completed the Inheritance Tax forms within the prescribed time scale and although the value of the assets including the gift made shortly before death meant the estate was over the current nil rate band rate, we claimed spousal exemption for the residual estate, thereby ensuring no tax was payable in this instance.
Once the tax position was finalised with no queries from HMRC, we applied for and received the Grant of Probate.
We effected the transfer of the property into the client’s sole name at the Land Registry
We paid the debts of the deceased and in anticipation of the Grant being issued we placed a S27 Notice in the London Gazette and a local newspaper. At the expiration of the notice period and with no claims having been received we distributed the surplus funds to the legatees.
Note – While the circumstances of this case are similar to an actual case we have dealt with, some circumstances may have been changed for the purpose of this example.
