Dealing with a death is difficult enough without the worry of attending to tax matters and administering the estate. Our team is on hand to help you in any way we can. Understanding the level of support you need at such a difficult time is our priority, and we will take you through the process to bring the estate to a close so that you meet your obligations efficiently and as painlessly as possible.
Tax Returns and registering the Estates
Tax Returns may need to be completed up to the date of death and the resulting tax liabilities agreed. The tax affairs of the estate will also need to be settled for the period of administration. In some circumstances this can be done informally but, otherwise, a Tax Return will be needed.
If a Tax Return is needed for the estate, it will need to be registered on the Government Register. Our Team can assist you with this process and can register the estate on your behalf.
An estate pays only basic rate tax during the administration period. The income of the estate is attributed to beneficiaries to the extent that they receive any payment or transfer of assets from the estate. We will produce a tax certificate for each beneficiary for each tax year, for inclusion on their personal Tax Return.
Inheritance Tax
If you have decided to deal with the Probate application yourself, but need help with the Inheritance Tax Return, or the calculations, we can assist. For those who have appointed a solicitor to deal with Probate on their behalf, we can liaise with your solicitor regarding the deceased’s financial matters and tax calculations. We can also support you in any negotiations with HMRC and check any final tax assessments.
When you draft your Will you hope that you have considered and planned as efficiently as possible for who should get what. However, hindsight is a wonderful thing. Post death variations give you the ability to change the terms of the Will (if everyone agrees). Variations may be desirable if a beneficiary wants to give some or all of their inheritance to younger generations. Beneficiaries might want to divert some of their inheritance to a trust, or to rearrange or wind up a trust made under the Will, or occurring under the intestacy rules.
Our team can advise you on the tax efficiency of post death variations. We can liaise with your solicitors on the contents of the Deed that will need to be drawn up, and we can deal with any formal tax elections that may be required.
Administration
The lengthiest phase can be realising and distributing the assets and paying liabilities. Great care is vital in this phase because you could be held personally responsible if you get it wrong.
Minimising tax liabilities is important and ensures assets are passed to beneficiaries in a tax efficient manner. Sometimes transferring assets to beneficiaries prior to sale can save tax.
Our team can help explain the position and tax treatment to the family. We can also maintain the financial records and produce administration accounts or less formal statements to account for your stewardship.
If all or part of the estate is left in trust, we can register the Trust at the appropriate time and provide our full range of Trust services thereafter.
Estate planning
In an ideal world, IHT liabilities on death should be minimised during your lifetime. The different family structures we see today make it even more important that anyone over 18 years of age has a valid and considered Will. We can work with your solicitor and other advisers to ensure you leave your estate as tidy and as tax efficient as possible.
Lifetime planning is a matter of balancing liabilities to different taxes, as saving one tax may cause liability to another. However, an event, such as an inheritance or selling your company, may give you more flexible options to plan for a tax efficient future.
Whatever your situation, we will help you to build your plan.
Tax is a complex area and the above Q & As are given as a simple guide only. You should always obtain specific advice that is relevant to your circumstances, before acting.
