Chapter 17: Ascertaining the residue

Question 1

What should PRs do if they have paid inheritance tax which should have been paid by the beneficiary?

Answer 1

Withhold tax due to ensure that they are reimbursed

Question 2

What should PRs do if pecuniary legacies are made “subject to tax”?

Answer 2

Withold the tax and pay the net legacy to the beneficiary

Question 3

What is the presumption regarding tax and pecuniary legacies?

Answer 3

Succession law generally assumes that a specific gift of UK property is “free of tax” unless the will states otherwise

Question 4

What is a corrective account?

Answer 4

Filed when the incorrect amount of inheritance tax was initially paid

Question 5

What is a Certificate of Discharge?

Answer 5

• Obtained from HMRC
• Certificate is an effective discharge from further inheritance tax liability (save for fraud or failure to disclose)
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Question 6

Do excepted estates require a Certificate of Discharge?

Answer 6

No

Question 7

When will there be an automatic Certificate of Discharge?

Answer 7

35 days after a grant of representation

Question 8

Who must pay for reasonable funeral expenses?

Answer 8

The estate

Question 9

Who must pay for legal and professional costs?

Answer 9

The estate

Question 10

Personal representatives are generally not entitled to charge for services. What are the exceptions?

Answer 10

• Will authorises it
• Beneficiaries agree
• Court authorises remuneration

Question 11

What are estate accounts?

Answer 11

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.

Question 12

What should be included in estate accounts?

Answer 12

1. Income account
2. Capital account
3. Distribution account

Question 13

What must residuary beneficiaries do with estate accounts?

Answer 13

Endorse (sign) the accounts and discharge the PRs with an agreement to indemnify them against all claims and demands

Question 14

What can PRs do if a beneficiary refuses to approve accounts?

Answer 14

PRs may ask the Court to approve the accounts or may pay the beneficiary’s share to the Court

Question 15

What can a beneficiary do if they refuse to sign estate account because they dispute the accounts?

Answer 15

Take administrative action to have the accounts examined

Question 16

Can a minor sign estate accounts?

Answer 16

No, their attorney or deputy should sign OR payments should be made into court