Winding up an Estate

Personal Representatives (PR’s)

Ownership of the deceased's estate passes first to their Personal Representatives whose job it is to find out the value of the deceased's property and possessions, pay any debts and taxes, (which may involve selling some items to raise cash) and only then transfer ownership to the beneficiaries.

There are certain situations which fall outside this rule. For example, pension entitlements and the proceeds of a life insurance policy may be so written that they also pass automatically to the named beneficiary and never come to the PR's at all. We can advise on the other exceptions.

Who are the PR's? If appointed by a Will they are known as executors and if there is no Will they are called administrators (and chosen from a list which the law lays down of those entitled to act).

The Grant of Representation

Whether or not there is a Will, the prospective executors or administrators will probably need to apply to the Probate Court for a "Grant of Probate" (if there is a Will) or "Letters of Administration" (if there is not) for which a fee is payable. The grant enables the executors/ administrators to deal with the deceased's property.

Inheritance Tax
Although the operation of inheritance tax (IHT) is somewhat complex, the concept is simple enough. None is payable where the value of the estate is less than £300,000. Above this amount, IHT is payable at the rate of 40% on the net value of the rest of the estate. There is no tax at all, whatever the value of the estate, on property going to a widow or widower, or to a charity. (See our comprehensive leaflet on inheritance tax for further information).

The IHT calculations will be shown in the Inland Revenue account, and subject to certain exceptions, the tax must actually be paid before the probate court will issue the grant. The exception is that tax which falls due on land and some business interests of the deceased can be spread over ten years, subject to interest payment, and to tax being paid at once if property is sold.