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When managing the affairs of a deceased person, Executors and Administrators face the crucial task of determining whether an estate tax return is necessary during the 'Period of Administration'.



This is a vital aspect of probate services to ensure compliance with an estate’s tax obligations to HM Revenue & Customs (HMRC) and to determine whether the deceased’s assets may be subject to Inheritance Tax (IHT).

Filing estate tax returns

The law mandates that Executors and Administrators must submit a tax return detailing the deceased’s income and disposal of chargeable assets.

This is for the tax year within the period that the deceased passed away. Executors and Administrators must register the estate online by 5 October of the tax year for which the return is due to receive a Unique Taxpayer Reference (UTR).

The return can then be submitted either via paper form SA900 or electronically. The return must be submitted by 31 October in paper form, following the end of the tax year the person has died, or by 31 January if submitted digitally.

Failing to meet these deadlines will result in an automatic penalty of £100. You should ensure that all required documents and the tax return reach HMRC by the relevant deadline to avoid penalties.

Criteria for filing estate tax returns

An estate tax return must be completed and submitted if any of the following conditions are met:

  • The total Income Tax and Capital Gains Tax for the administration period exceeds £10,000.
  • The estate's value was over £2.5 million at the time of death.
  • For deaths before 6 April 2016, more than £250,000 a year was generated from the estate’s asset sales.
  • For deaths on or after 6 April 2016, over £500,000 a year came from the estate’s asset sales.

It's important to note that the estate tax return is distinct from any personal tax returns of the deceased, which cover any income from the estate up to the date of death.

Alternative to formal filing

For smaller estates that do not meet the above criteria, Executors and Administrators can opt for 'informal arrangements' by notifying HMRC directly.

This involves providing an assessment of due taxes along with details of the deceased and the person handling the estate.

For more advice on the above, get in touch with our experienced probate team.


As technology advances, digital assets are becoming more and more common, which can complicate the probate process.

Probate, a process that deals with the distribution of a deceased person's estate, has traditionally dealt with physical assets such as properties, money, and personal belongings.

However, in this increasingly digital world, what happens to one's online assets upon death must also be considered.

What are digital assets?

This term encompasses a broad range of digital belongings. These include assets such as:

  • Emails
  • Digital photos or videos
  • Social media accounts
  • Cryptoassets
  • Digital intellectual property
  • Domain names
  • Online banking accounts

How do these impact probate?

It could be easy to overlook digital assets, especially if the Executor does not have the relevant logins for accounts.

However, any digital assets should be included in the valuation of the estate, as they impact whether Inheritance Tax (IHT) is due.

We can help you to identify the estate’s assets and liabilities to determine this value, along with preparing the relevant tax returns.

IHT may be due if the estate exceeds the nil rate band of £325,000. Should the residence nil rate band apply, the tax-free threshold will be increased to £500,000.

The challenge with cryptoassets

As cryptoassets are considered part of the estate for IHT purposes, their value must be determined and taken into account.

It is advised for individuals to outline how to access their cryptowallet in their Will, which makes it easier for the Executor to identify and value assets.

In the instance that the individual’s Will didn’t outline how to access their cryptowallet, this can pose problems.

Experts may be able to help to review the deceased’s computer to gain account details, however this may not be possible.

It is essential for Executors to attempt to identify and value all assets held by the deceased and seek advice from experts to guide them through this.

It is important to note that some digital assets do not hold any value and are therefore not included in the probate process.

For more advice on the above, get in touch with our experienced probate team.


Losing a loved one is a challenging and emotional time for families and friends. There is considerable amount of stress just dealing with the passing of a love one and to add to this is paying of inheritance tax within six months of death and completion of the Inheritance Tax return form within 12 months of death.

Amidst the grief, the probate process adds a layer of complexity, particularly when it comes to dealing with property.

You can only sell the property after a Grant of Probate is issued and this is legal document that allows the executor(s) to transfer the property into the beneficiary’s name so that the property can be sold.

Understanding probate process

The first step in this probate process is to prepare inheritance tax returns to establish the inheritance tax position and the gross and net assets of the estate. HMRC will extract the gross and net assets figures of the estate and will check that the inheritance tax is paid before notifying the Probate Office to commence dealing with the probate application. Please note that the Grant of Probate is not issued until the inheritance tax is paid.

The inheritance tax return form shows all the individuals assets and liabilities as at date of death. Therefore, valuations are required as at date of death of shares, bank account and property.

Part of the process of reporting a property on the inheritance tax return is having a valuation of the property as at date of death which is required. We would recommend that this is done by a Royal Institute of Chartered Surveyors (RICS) qualified surveyor as HMRC uses people with the same qualification to review the valuations when submitted to them.

Depending on the Will, who is inheriting and what assets are being inherited will determine the amount of inheritance tax to pay. However, if the will is not tax efficient a deed of variation can be made to reduce the amount of inheritance tax paid.

This process can be difficult, so it is important to understand all the steps you need to take with help from an expert.

After the Grant of Probate is issued:

Please place an advert in the London Gazette and local paper as soon as possible. Placing a deceased estates notice demonstrates that enough effort has been made to locate creditors before distributing an estate to its beneficiaries (the people who will inherit the estate).

This protects the executor from being personally responsible for money owed to any unidentified creditors. Once the deceased estates notice has been placed, creditors have two months and one day to make a claim against the estate.

Depending on the Will the executor can use the Grant of Probate to transfer assets into beneficiaries’ names or assets can be put into executor’s names and sold with the proceeds collected in an executor account.

After the assets are collected and debt payments of the estate have been made, the remaining balance can be split between the beneficiaries according to the Will. An estate accounts produced which can be presented to the courts if requested.

For more advice on the above, get in touch with our experienced probate team for advice. We can also provide probate guide which covers all aspects of the probate process by emailing contact@grunberg.co.uk


Inheritance tax (IHT) is a tax that is levied on the transfer of assets after someone dies.

IHT can be a significant burden for some, and careful planning can help to ensure that your beneficiaries are not left with a large tax bill.

Understand the current IHT rules

It's important to understand the current IHT rules and how they may impact your estate.

IHT is currently charged at a rate of 40% on estates over the nil-rate band, which is currently set at £325,000.

There are a number of exemptions and reliefs available that can help reduce the amount of IHT payable, such as the spouse exemption, the annual exemption, and business property relief.

It's important to understand these rules and how they may apply to your estate.

Consider making lifetime gifts

One way to reduce the amount of IHT payable is to make lifetime gifts.

You can give away up to £3,000 per year without incurring any IHT liability, and you can also make additional gifts of up to £250 to any number of people each year.

In addition, gifts to charity are exempt from IHT.

Making lifetime gifts can help reduce the size of your estate and potentially reduce the amount of IHT payable.

Make use of trusts

Trusts can be a useful tool for IHT planning.

By placing assets into a trust, you can potentially reduce the size of your estate and transfer assets to your beneficiaries tax-efficiently.

There are a number of different types of trusts available, and it's important to choose the right one for your individual needs and circumstances.

Consider life insurance

Life insurance can be another useful tool for IHT planning.

By taking out a life insurance policy, you can provide a tax-free lump sum to your beneficiaries that can be used to pay any IHT liability on your estate.

Life insurance policies can be written in trust, which means that the proceeds are paid directly to your beneficiaries and are not subject to IHT.

Residence nil rate band

The residence nil rate band (RNRB) reduces the amount of inheritance tax payable on a person's estate upon their death.

It is in addition to the standard nil rate band, which is the amount that can be inherited tax-free.

It is currently set at £175,000 per person, but this amount is subject to change each tax year.

To be eligible for the RNRB, the property or share of the property being inherited must have been the main residence of the deceased, and it must be left to their direct descendants such as children or grandchildren.

The RNRB is gradually phased out for estates worth more than £2 million and is completely lost for estates worth more than £2.25 million.

It is also possible for the unused portion of a deceased spouse or civil partner's RNRB to be transferred to the surviving partner's estate.

The RNRB provides an additional tax allowance for individuals who leave their main residence to their direct descendants upon their death, reducing the amount of inheritance tax payable on their estate.

Changes to pensions

In the Spring budget, the Chancellor announced that the Lifetime Allowance of £1,073,100 is being scrapped.

This means that pensioners who exceed this amount will no longer be taxed at the rate of 25 per cent on the additional income and 50 per cent when withdrawn as a lump sum, known as the Lifetime Allowance (LTA) charge.

The charge will be removed from April 2023 and the LTA will be abolished from April 2024.

The Pensions Annual Allowance was also increased from £40,000 to £60,000.

For more advice on Inheritance Tax or the probate process, get in touch with our experienced probate team.


If you have a large estate and are a high-net-worth individual, Inheritance Tax (IHT) could impact your loved ones hugely, when it comes to your estate being passed down and the amount that they will receive when you pass away.

How does Inheritance Tax work?

Inheritance Tax applies on the estate of someone who has died when at least part of the estate exceeds the tax-free threshold of £325,000 (now frozen until April 2028). This usually consists of property, investments and general savings.

The Inheritance Tax rate is 40 per cent, charged on any of the estate that exceeds £325,000.

If you are a high-net-worth individual and believe your beneficiaries will be charged Inheritance Tax after you have passed away, it is important to understand what they will pay and if there are any ways to plan for this and mitigate the costs in any way.

Understand the value of your estate in advance

Having an accurate idea of your estate value will help you to understand how much Inheritance Tax your beneficiaries are likely to pay.

Remember to account for any debts and funeral expenses when you are working out your estate’s value. It is also beneficial to review this regularly, as the value of your estate is likely to increase over time.

Leaving your property to your spouse/civil partner

If your property is left to your civil partner or spouse, they will not pay any IHT and this is applicable across all assets you leave to your spouse or civil partner.

However, if you leave the property to anyone else in your Will, then they may have to pay IHT, if the estate surpasses the threshold.

Residence nil-rate band

If you own a property, you can apply this additional IHT to the threshold of £325,000. This means that the overall allowance is increased to £500,000 but you must meet certain criteria for this.

You must have lived in the house at some point, after 8 July 2015.

And you must leave the house to a direct descendant, like your children, grandchildren, stepchildren etc.

If the value of your estate surpasses £2 million, then RNRB is tapered.

RNRB decreases by £1 for every £2 that your estate is above £2 million.

If you leave your entire estate to a spouse, then you won’t make use of your nil-rate band and your spouse’s tax-free allowance will double to £650,000.

Similarly with the RNRB, if this is unused, your spouse will have £350,000 added to their tax-free allowance. This is largely only useful if your property is worth £350,000 or more.

We can offer expert guidance on IHT and how to maximise your estate for your loved ones, contact us for advice.

 


Inheritance Tax in 2021-22 was £6.1 billion, a £729 million increase from £5.4 billion the year before.

What is Inheritance Tax?

IHT is a tax on the estate (the property, money, and possessions) of someone who’s died above a set of thresholds, known as the nil-rate band and residence nil-rate band.

The tax is paid by the estate but affects the amount beneficiaries could receive.

How may you be affected by Government changes?

Families paid out £326 million more in Inheritance Tax (IHT) last year after HM Revenue & Customs implemented more rigorous checks on underpayments. Investigators raised 28 per cent more in the 2021-2022 tax year than in the year before. HMRC launched 4,258 investigations in 2021/2022 to recover unpaid tax from bereaved families.

The amount paid in IHT is rising as the £325,000 nil-rate band threshold has not increased since 2009.

Similarly, the residence nil-rate band threshold of £175,000 also hasn’t increased.

One in 25 estates is liable for IHT and it is estimated that this figure will rise.

Who is responsible for paying Inheritance Tax?

If there is a Will, the Executor will be responsible for paying IHT. The Beneficiaries of a Will do not pay IHT on what they inherit, but may have to pay taxes on rental income if they inherited a house.

How can you mitigate Inheritance Tax?

IHT can be reduced through a variety of methods.

If you give gifts of up to £3,000, this will be tax-free and under annual exemptions. For example, this may include payments to help with living costs or birthday gifts.

If you give gifts of £3,000 or more, these may be subject to the seven-year rule meaning these gifts will count towards the value of your estate.

If you die within seven years of gifting, then the gift will count towards your nil-rate band meaning it may be subject to IHT.

You will pay less IHT, the longer you live after the gift is made and you could be charged IHT if you give away more in the seven years before your death.

You may also choose to give away gifts to charity which can help mitigate Inheritance Tax. If you choose to give away gifts to charity, equal to 10 per cent or more of your estate, you only pay IHT at a rate of 36 per cent.

Other ways which may allow you to lower your IHT liability include trusts, Business Property Relief, and Agricultural Property Relief.

If you need advice on Inheritance Tax or probate-related matters, contact us today.


Considering what will happen after you have passed away is not the happiest subject, but it is necessary to consider how to ensure your loved ones are well looked after.

One key consideration is who will inherit your estate, along with whether they will be required to pay Inheritance Tax (IHT).

Whilst who will inherit your estate will be outlined in your Will, you may not have thought about the impact of IHT on how much they will receive.

Normally, if the estate amounts to over £325,000 IHT will be due. However, there are circumstances in which this Nil Rate Band is increased.

For instance, if you own a property and leave it to a spouse or direct descendent, the Residence Nil Rate Band will be applied, increasing the tax-free allowance for the estate to £500,000.

Another exception to the threshold applies if you are married or in a civil partnership and your estate is valued under the taxable threshold.

In this case, the remaining amount that you haven’t used can be added to your partner’s threshold, which could increase your combined threshold up to as much as £1 million!

Even if your estate is valued above these figures, there are several measures you can take to minimise the level of taxable income.

If Inheritance Tax is due, the standard tax rate is 40 per cent, which is charged on the part of your estate that is above the threshold.

How can you reduce the amount due?

As mentioned, you can plan ahead to reduce the proportion of your estate that will be subject to IHT, and even be charged a lower rate of tax.

For instance, if you leave at least 10 per cent of the value of your estate to a charity in your Will, the IHT rate is lowered to 36 per cent on some assets. This is due to charitable legacies not counting towards the taxable value of the estate.

Another way to reduce the taxable amount of the estate is through gifts. If you choose to give small gifts during your life, these are usually exempt from Inheritance Tax.

Although, if you give away more than £325,00 in the seven years before your death, this could be classed as part of your estate and thus, liable to IHT.

There is also an annual exemption allowing you to transfer £3,000 worth of gifts, which can also be carried over for one year if it has not been used.

Planning for IHT can reassure you that your family is financially secure after you die, but it can be complex. Therefore, it is best to consult an accountant for advice on your options.

Find out more about Grunberg & Co’s private client and probate services here.


More and more people are being drawn into paying Inheritance Tax (IHT), as the price of property soars.

This is because former Chancellor Rishi Sunak froze the nil rate thresholds for paying the tax at £325,000 until 2026, while the value of homes has rocketed, potentially drawing more people into paying the tax.

There are some exceptions, which are listed below, but generally, people are then faced with paying 40 per cent IHT on anything gained over the £325,000 figure.

How much do I have to pay?

IHT is levied at 40 per cent on everything in an individual’s estate at their death above the Nil Rate Band of £325,000.

However, many taxpayers also benefit from the Residence Nil Rate Band, which adds an additional allowance of £175,000 for their main property if it is passed to direct descendants.

If you are married or in a civil partnership these allowances can be passed to a spouse or partner once the other person dies.

According to the Office for National Statistics (ONS), in 2009, the average price of a home in the UK was £227,000. In 2021 that had rocketed to £327,000, £2,000 above the initial Nil-Rate band.

In high-value areas, such as the South East and London, this figure is even higher and it means that more and more taxpayers – and not just the wealthiest members of society – are facing IHT bills on their estates after death.

What is IHT?

Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who’s died.

As mentioned, there is normally no Inheritance Tax to pay if:

  • The value of your estate is below the £325,000 threshold
  • You leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club
  • If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000
  • If you are married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die.

This means their threshold can be as much as £1 million!

What are the rates for IHT?

The standard IHT rate is 40 per cent. However, this is only charged on the part of your estate that is above the threshold.

So, if your estate is worth £600,000 and your tax-free threshold is £500,000. The Inheritance Tax charged will be 40 per cent of £100,000 or £40,000.

The estate can pay IHT at a reduced rate of 36 per cent on some assets if you leave 10 per cent or more of the ‘net value’ to charity in your Will.

Are there any ways to save on IHT?

Here are some of the ways that you can cut your IHT bill with careful planning:

Gifting

There’s usually no IHT to pay on small gifts you make out of your normal income, such as Christmas or birthday presents, which are commonly referred to as ‘exempted gifts’.

There is also no IHT to pay on gifts between spouses or civil partners and you can transfer as you like during your lifetime, as long as they live in the UK permanently.

However, other gifts count towards the value of your estate, and you could be charged IHT if you give away more than £325,000 in the seven years before your death.

Gifts include anything that has value, or anything transferred at a loss to a family member, such as the sale of a home to a descendant for less than it is worth.

However, you can give away £3,000 worth of gifts each tax year without them being added to the value of your estate thanks to the ‘annual exemption’.

If you have any unused annual exemption, you can carry it forward to the next year - but only for one year.

Each tax year, you can also give away additional gifts if they relate to special events such as weddings, birthdays or Christmas, or if they support the living costs of another person, such as an elderly relative or a child under 18.

You can give as many gifts of up to £250 per person as you want during the tax year as long as you have not used another exemption on the same person.

If there is IHT to pay, it’s charged at 40 per cent on gifts given in the three years before you die. Gifts made three to seven years before your death are taxed on a sliding scale known as ‘taper relief’. After seven years the gift will be IHT-free.

Business Property Relief or Agricultural Property Relief

Certain assets receive relief from IHT, these include Business Property, Agricultural Property and Heritage Assets.

These reliefs can reduce or eliminate the value of an asset being included within an estate, but they often rely on certain conditions being met.

However, not every interest in a business will qualify for these specialist reliefs so it is worth seeking specialist professional advice when managing your estate.

Charity

Anything left to charity in your Will won’t count towards the total taxable value of your estate. Known as a ‘charitable legacy’, this will also reduce the IHT rate on the rest of your estate from 40 per cent to 36 per cent, as long as you leave at least 10 per cent to charity.

Trusts

Trusts can play a role in reducing a family’s exposure to IHT so that more can be passed on to future generations, but they say they can also help look after family assets and provide for family members who are too young or vulnerable to deal with financial matters.

A trust is a legal arrangement where you gift cash, property or investments to a separate entity (the trust). One who gifts assets is the Settlor, the trustees then oversee the management of the assets for the benefit of a third party or parties.

One of the main benefits of a trust is that, should you elect to act as the trustee, you would continue to maintain control over the assets gifted whilst your estate’s exposure to IHT is reduced as, after seven years, the gift is out of the Settlor’s estate completely.

Assets transferred into a trust are no longer considered as belonging to the Settlor, so they are taxed according to the rules governing the trustee.

Many people would prefer to provide for a beneficiary through a trust as opposed to passing assets to them outright. This could involve a source of income for a beneficiary for life, or providing education for children but not allowing them to access funds until they are older.


A growing number of over 70s could be at risk of large Inheritance Tax bills due to their lack of marital status.

It comes as research has shown that the number of over 70s choosing to live with their partner rather than marry or enter a civil partnership has surged by 288 per cent over the last 20 years.

Over the years cohabitation has increased in popularity, which is now having an impact on couples being hit with large Inheritance Tax bills and being forced to sell their home.

There has reportedly been an increase in the number of unmarried couples over 65 seeking professional advice, whose homes are subject to Inheritance Tax when one partner dies.

If one partner owns the property in their name alone, the surviving partner (if they are unmarried and not in a civil partnership) has no clear right of ownership and therefore cannot take advantage of being exempt from paying Inheritance Tax.

They would then be left to pay a potentially hefty bill, which would need to be paid within six months of the death.

As well as mourning the loss of a loved one, the surviving partner would have to quickly sell the home quickly, which comes with more stress and likely a reduced price for the property.

What action can cohabiting couples take?

To avoid this problem, cohabiting couples could ensure the home is in common ownership when they purchase it to ensure peace of mind for the future.

It is also a good idea to get professional advice for succession planning so surviving loved ones are not left with added stress and insecurity.

Inheritance Tax is something we don’t want to think about, but it is important that you understand your liabilities when the time comes. Couples should talk about their situation, so they understand potential future Inheritance Tax liabilities.

When do you have to pay IHT?

Currently, the threshold to pay Inheritance Tax is £325,000. Therefore, it will not be due if the value of the estate amounts to less than £325,000.

The standard rate for Inheritance Tax is 40 per cent, but this is only applied to the amount above the £325,000 threshold.

Another consideration is that Inheritance Tax is not due when the value of the estate exceeds £325,000 but the amount above the threshold is left to the deceased’s spouse or civil partner, a charity or a community sports club.

Find out more about Grunberg & Co’s private client and probate services here.


Experts are warning that a post-Covid rise in disputed wills is evidence that not enough estates are getting professional advice when it comes to complex probate cases.

According to the latest data, the new number of contested probate cases in England and Wales rose in 2019 and 2020, when there were 192 contested Wills, the highest number ever recorded.

This follows from the figures in 2019 being 50 per cent higher than those in 2018 – demonstrating an upward trend in conflict that is expected to continue in future.

Solicitors, speaking to the publication Today’s Wills and Probate, have suggested that the rise in contentious cases could be due to people who suffered financially in the pandemic having greater motivation to obtain larger inheritances.

However, equally, there is a growing concern within the legal profession that some families may be using unqualified advisers to deal with challenging cases, leading to disputes and the potential loss of thousands of pounds in tax relief on estates.

It is thought that a hike in the price of probate fees earlier this year might have forced some families to reduce their costs by seeking cheaper, less qualified advisers, who are unable to deal with conflicts that may arise during the probate process.

The probate fees rose from either £155 or £215 depending on the type of probate needed, to a flat fixed fee of £273.

It was claimed by the Ministry of Justice that this sudden jump in fees was needed to fund improvement to the outdated probate system to make it more effective.

In most cases, families are advised to not only seek help from a qualified adviser but also a solicitor with sufficient experience to deal with contested Wills and probate, as well as the expertise to help them minimise potential Inheritance Tax bills.

Find out more about Grunberg & Co’s private client and probate services here.