The following Trusts and Inheritance Tax guidance note Produced by Tolley in association with Higgs & Sons provides comprehensive and up to date tax information covering:
When the personal representatives have obtained the grant of representation in the estate, they begin to collect in the deceased’s assets and pay liabilities. When realising the assets, the first decision for the personal representatives is what assets should be realised. In coming to this decision, they should have regard to the following matters:
repayment of loan raised to pay inheritance tax ― the general rule is that inheritance tax is paid from the residuary estate unless there is a contrary direction in the Will. Assets should not be realised to pay inheritance tax if they have been specifically gifted under the terms of the Will
the statutory order for the application of assets in a solvent estate for the payment of debts under the Administration of Estates Act 1925 Sch 1, Part II, in the absence of contrary intention by the deceased in the Will, should apply. See below
ease of realisation ― some institutions may only require sight of a sealed copy of the grant of representation and their closure form duly signed by the personal representatives whereas upon selling certain assets, advice may have to be sought from a professional and formal documentation executed
wishes of the beneficiaries ― where assets are being realised to pay for the liabilities of the estate, the residuary beneficiaries should be consulted as to which assets to sell if the residuary estate exceeds the liabilities
tax considerations ― when realising assets, the personal representatives should take care and consider each of the capital gains tax, income tax and inheritance tax consequences. The personal representatives should also consult with the beneficiaries as to their own tax consequences of receiving assets from the estate. It may be advantageous to transfer assets to beneficiaries prior to the sale of an asset in order to utilise their own exemptions, losses and lower rates of tax. See the Legatees’ capital gains tax position guidance note
Discussions should be held with any
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