Trusts and Inheritance Tax

Format for estate accounts

Produced by Tolley
  • 23 Mar 2022 10:31

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

  • Format for estate accounts
  • Introduction
  • Synopsis
  • Balance sheet
  • Estate at death
  • Capital account
  • Adjustments to the estate at death
  • Reversal of accrued interest and dividends
  • Gains and losses on disposal of assets
  • Inheritance tax and capital gains tax
  • More...

Format for estate accounts

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.

There are no prescribed rules as to the form the accounts should take but the overriding requirement is that they should be clear, accurate and easy for the personal representatives and beneficiaries to follow. For a straightforward administration where the residuary beneficiaries are absolutely entitled and the personal representatives are concerned to keep down the legal costs having regard to the size of the estate, a simple cash account with receipts on one side and payments on the other will normally suffice.

For a larger estate, a more detailed set of accounts will be appropriate. 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 typical layout and presentation.

Synopsis

The synopsis summarises the provisions of the Will or intestacy rules. Where the distribution has been altered by an instrument of variation, or where legacies have lapsed (the beneficiary cannot take) or adeemed (the asset no longer exists) it may detail the changes. Alternatively, it may just summarise the distribution of the estate as it turned out. The professional will need to judge the degree of detail required by

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