Chapter 17: Ascertaining the residue Flashcards
What should PRs do if they have paid inheritance tax which should have been paid by the beneficiary?
Withhold tax due to ensure that they are reimbursed
What should PRs do if pecuniary legacies are made “subject to tax”?
Withold the tax and pay the net legacy to the beneficiary
What is the presumption regarding tax and pecuniary legacies?
Succession law generally assumes that a specific gift of UK property is “free of tax” unless the will states otherwise
What is a corrective account?
Filed when the incorrect amount of inheritance tax was initially paid
What is a Certificate of Discharge?
- Obtained from HMRC
- Certificate is an effective discharge from further inheritance tax liability (save for fraud or failure to disclose)
Do excepted estates require a Certificate of Discharge?
No
When will there be an automatic Certificate of Discharge?
35 days after a grant of representation
Who must pay for reasonable funeral expenses?
The estate
Who must pay for legal and professional costs?
The estate
Personal representatives are generally not entitled to charge for services. What are the exceptions?
- Will authorises it
- Beneficiaries agree
- Court authorises remuneration
What are estate accounts?
Accounts prepared by PRs to show the residuary beneficiaries what is available to them.
Show IHT paid, expenses incurred during the administration period, how assets have been distributed and income received.
What should be included in estate accounts?
- Income account
- Capital account
- Distribution account
What must residuary beneficiaries do with estate accounts?
Endorse (sign) the accounts and discharge the PRs with an agreement to indemnify them against all claims and demands
What can PRs do if a beneficiary refuses to approve accounts?
PRs may ask the Court to approve the accounts or may pay the beneficiary’s share to the Court
What can a beneficiary do if they refuse to sign estate account because they dispute the accounts?
Take administrative action to have the accounts examined