Format for estate accounts

By Tolley
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The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Format for estate accounts
  • Introduction
  • Synopsis
  • Balance sheet
  • Estate at death
  • Capital account
  • Income account
  • Distribution account
  • Supporting schedules

Introduction

Estate accounts give a linear account of the process of the administration. The account begins with a list of everything the deceased owned at the date of death, and goes on to show how the assets have been realised, expenses paid, and the value distributed to beneficiaries. The following sections describe the customary elements of a set of estate accounts. It is recommended that this guidance note is read in conjunction with the fictional Estate accounts example, which illustrates the layout and presentation.

Synopsis

The synopsis summarises the provisions of the will. Where the will or intestacy has been altered by an instrument of variation, or where legacies have lapsed it may detail the changes. Alternatively, it may just summarise the distribution of the estate as it turned out. The accountant will need to judge the degree of detail required by the users. The synopsis will state the names of the testator, the executors and advisers. It should give the following relevant dates:

  • date of will
  • date of death
  • date of probate
Balance sheet

The balance sheet presents the position at the accounting date. It shows the estate capital plus income (which is the amount owed to beneficiaries) represented by assets less liabilities. When the administration is complete, it will show the amounts due to named beneficiaries represented by cash. The full set of estate accounts tells the story of the administration and calculates the amounts due to beneficiaries. The balance sheet reconciles the calculation to the cash or assets held.

Estate at death

The accounts should provide, as a starting point, a list of all the deceased's assets and liabilities at date of death. It will

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