Probate procedures in the United Kingdom

1.    The first step in a probate matter is to analyse whether the main probate should be dealt with overseas or in England.

The easiest way to deal with an estate (money, property and possessions left) is to have us take out what is called a Grant of Representation for the purpose of proving authority to act as personal representative to administer the estate and take steps to collect and deal with any assets situated in England. “Estate” encompasses both real and personal property owned by the deceased.  If we obtain a Grant of Representation it would enable us to deal with any formalities and unexpected scenarios, which may arise under the English legal system in respect of collecting in and dealing with the Estate.

Where the deceased died domiciled in a foreign jurisdiction and left some assets in the UK such as shares or funds in a bank account it may be necessary to apply for a Grant of Representation in the UK in addition to the principal probate which is taking place in the foreign jurisdiction.

2.    Inheritance tax on the Estate (“IHT”).

In determining whether an estate is to be taxed you normally look at the nexus or connections with a territory. If the choice is between England or a foreign jurisdiction, the following needs to be considered from an English perspective:

The Estate is generally to be taxed in the jurisdiction in which the deceased is regarded to be domiciled:

  • Domicile of Origin: At birth you are assigned a domicile of origin which is usually dependent upon the domicile of one of your parents.
  • Domicile of dependence: While you are under 16 your current domicile will change with any change in that parent’s domicile.
  • Domicile of Choice: If a person’s domicile is not dependent upon another person then he is free to change his current domicile provided that it can be shown that:

– he is a resident in the new county, and

– he intends to reside there permanently or for an unlimited time.

  • Deemed Domicile: Under English Law a person is regarded to be domiciled in England if he or she lived in England for at least 17 years during the last 20 years prior to the death.

An individual who is not domiciled in the UK is subject to IHT only on their UK estate.

However there are circumstances, where the UK tax authorities will consider a person to a deemed domicile in the UK and therefore liable to IHT on their worldwide estate to the UK. This will e.g. be the case where a person has lived in the UK for 17 out of the previous 20 years.

3.    The documents we require from you in order to review the matter and to obtain a grant  in England are as follows:
  1. Death certificate (with a certified English translation if the original if in another language.  This should be translated by an authorised translator and in some cases also be certified by a Notary Public);
  2. A court stamped copy of the foreign grant if dealing with a matter where the main  probate is in another jurisdiction as the UK Probate Registry will need evidence thereof;
  3. An English translation of the foreign grant (normally translated by an authorised translator and in some cases certified by a Notary);
  4. The original Will (if any);
  5. An English translation of the Will (if not in English) (normally translated by an authorised translator and in some cases certified by a Notary);
  6. National Insurance number of the deceased (if applicable and known) and the relationship of the executor to the deceased;
  7. A detailed list of all assets (wherever in the world) belonging to the estate and the approximate value of each asset as we are required to inform Her Majesty’s Revenue and Customs of the value of the estate as at the date of death;
  8. Power of Attorney signed by the executor.  We will provide you with this form and you merely have to sign it and return it to us. The purpose of the Power of Attorney is to enable us to deal with the estate and apply for English grant;
  9. A list of all debts, outstanding bills and the funeral costs in the UK (as these expenses can be deduced for tax purposes); and
  10. Details regarding any transfers or dispositions of UK property (both real and personal within the last seven years).

If there is no Will in the matter then we also need you to prepare a “family tree” in order for us to establish who is entitled to what and who should sign the Power of Attorney.

4.    Inheritance Tax (“IHT”)

Having received all of the above mentioned documents it is necessary for the tax position to be cleared with the HMRC in order for us to obtain the Grant of Representation.

We will have to attain the Net value of the estate by deducting all debts and liabilities from the assets.  If the net value of the estate is below the nil rate band (currently £325,000 in England) inheritance tax will not need to be paid and a simpler form will be submitted to the Probate Registry.

If the value of the net estate is above the nil rate band, any tax due on the estate will need to be paid before the Grant of Representation can be obtained.

It is important to bear in mind that any sale of property cannot be completed until the Grant of Representation has been obtained.  It is not unusual for probate sales to become delayed due to delays with the Probate Registry.

5.    Procedure for obtaining Grant of Representation.

There are three forms of Grant of Representation:

  1. Probate (with a will and a named executor);
  2. With a Will and no executor appointed (Letters of administration with Will annexed);
  3. Letters of administration (without a Will).

Which one applies will depend on the circumstances.

6.    Inheritance Tax – Payments & Deadlines

The first £325,000 of the estate is tax free. Any value above the £325,000 is taxed at 40%.

Inheritance tax is payable 6 months after the date of death. If the tax is not paid within this period of time interest will accrue at the English National Bank’s rate.

Please note that further penalties may also occur if the tax is paid late.

If the estate is taxable it is not uncommon for the heirs to take out a loan as the tax must be paid before we can obtain Grant of Representation and until we have Grant of Representation we cannot gain access to the funds of the estate or sell any property in the estate. We are able to help the heirs obtain a special loan for the purposes of paying the inheritance tax.

7.    Inheritance Tax Accounts

Inheritance tax accounts must be prepared and filed with the HMRC. The accounts will set out the estimated value of the estate and the calculations of the tax payable on the estate. These accounts must be filed at maximum 6 months after the date of death. There is currently a penalty of £200 if the accounts are filed more than 6 months after the date of death. Once the accounts are more than 1 year late a penalty of £200 will accrue per month until the accounts are filed up to a maximum of £3,000 or the amount of tax due whichever is the lower. These penalties are likely to change on an ongoing basis.

Please note that we cannot file the Inheritance Tax Accounts until you send us the list of assets as specified above in paragraph 3.

Please keep in mind the following when you instruct us:

A. We cannot deal with or get access to the estate and all its assets until we have obtained a Grant of Representation.
B. We cannot obtain a Grant of Representation until the tax position is cleared (i.e. payment of inheritance tax and filing of inheritance tax accounts (accounts needs to be filed even if it is anticipated that inheritance tax is not payable on the inheritance).
C. Any sale of property cannot take place until we have obtained a Grant of Representation as we will need this document to legally be entitled to sell the property to any prospective buyer.

The material contained in this guide is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© Miller Rosenfalck LLP September 2013

Please contact:

Steen Rosenfalck

DD +44 (0)20 7553 9931

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