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UK Inheritance Tax Late Penalties

UK Inheritance Tax Late PenaltiesBritains have been hit with £6 million penalties for late filing of death taxes – UK Inheritance Tax Late Penalties Revealed!

  • Brits losing loved ones are being hit with £6 million a year in penalties for filing inheritance tax accounts late[1], analysis of HMRC data reveals
  • Estates in the South East paid an estimated £1.3 million in penalties, narrowly beating London residents, who faced a £1.2 million bill
  • Residents in Richmond, West London, were worst hit, with 27 estates facing fines of £44,000 in one year
  • Solicitors Near Me urges those inheriting to seek help from a lawyer to avoid late filing penalties

British estates are paying £6 million a year in penalties for filing inheritance tax accounts late[1], reveals analysis by Solicitors Near Me.

The charges come on top of the tax itself, which raised £6 billion for the Chancellor in the most recent full-year figures[2].

Some 4,990 estates in the South East paid more than £1 billion in inheritance tax in one year, second only to London. The 858 who filed their accounts late are likely to have paid £1.4 million in penalties. In London, the 721 late estates are predicted to have paid almost £1.2 million in fines.

Inheritance tax is charged at 40% on the value of an estate above £325,000, though there is nothing to pay if assets are left to a spouse, civil partner, a charity or a community amateur sports club.

Accounts must be filed by the end of the sixth month after the person died, with a £100 penalty being applied for late accounts. An additional £100 penalty would apply if the accounts are six to 12 months late, with a monthly fee applying from then on up to a maximum of £3,200[3].

Table: Inheritance tax paid and late accounts penalties by UK region

Region Number of estates paying inheritance tax Inheritance tax paid (millions) Estates late to file accounts Penalties
South East 4,990 £1,080 858 £1,373,248
London 4190 £1,260 721 £1,153,088
East of England 2,540 £470 437 £699,008
South West 2,440 £472 420 £671,488
North West 1,540 £278 265 £423,808
West Midlands 1,310 £220 225 £360,512
Scotland 1,240 £231 213 £341,248
East Midlands 1,070 £196 184 £294,464
Yorkshire and the Humber 982 £192 169 £270,246
Wales 699 £97 120 £192,365
North East 371 £61 64 £102,099
Northern Ireland 235 £42 40 £64,672
Unknown, missing or other 1,430 £361 246 £393,536
Total 21,607 £4,599 3,962 £6,339,782
Source: HMRC data for 2020/1, the latest full-year data

The parliamentary constituency of Richmond Park in West London had the most people paying inheritance tax, with the 159 estates forking out £62 million. The 27 estates filing late accounts were projected to have paid £43,757 in penalties.

Table: Parliamentary constituencies paying the most inheritance tax penalties

Region Parliamentary constituency Number of estates paying inheritance tax Inheritance tax paid (millions) Estates late to file accounts Penalties
London Richmond Park 159 62 27 £43,757
South East Esher and Walton 141 32 24 £38,803
London Finchley and Golders Green 134 59 23 £36,877
South East Beaconsfield 128 30 22 £35,226
South East Chichester 127 37 22 £34,950
South East South West Surrey 121 30 21 £33,299
East of England South West Hertfordshire 116 31 20 £31,923
London Hampstead and Kilbum 115 82 20 £31,648
South East Mole Valley 113 28 19 £31,098
East of England Hitchin and Harpenden 107 16 18 £29,446
Source: HMRC data for 2020/1, the latest full-year data

Solicitors Near Me is urging executors of estates to seek help from a lawyer as quickly as possible to avoid incurring a late filing penalty.

Nicholas Jervis, CEO of Solicitors Near Me, said: “Many people feel inheritance tax is an unfair cash-grab by the government, so news that Brits are paying £6 million in penalties is rubbing salt in the wound.

“Talking to an experienced solicitor as soon as possible is the best way to make sure you’re paying not a penny more than you have to.

“A good solicitor can also help the process go more smoothly during what can be a difficult time for grieving families.”

 

Notes to editors

  1. Data from HMRC: Inheritance Tax statistics: Table 12.12was used to find estates liable for inheritance tax in the year 2019/20. An approximation of the number of accounts filed late was gained by examining the number of self-assessment tax returns filed late. In 2020/21, some 2,090,000 late filing penalties were issued for 12.2 million returns. 2.09 million / 12.2 million = 17.2% of accounts filed late. The average penalty was taken to be £3,200 / 2 = £1,600.
  2. HMRC: Inheritance Tax statistics: Table 12.1 – analysis of receipts
  3. HMRC: Inheritance Tax manual

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Can You Do Probate Yourself?

Can You Do Probate Yourself?Can you do probate yourself? Yes, you can do probate yourself. There’s no legal requirement to hire a probate solicitor or any legal professional.

The big question is whether you should do probate yourself.

To be connected to a specialist probate solicitor near to where you live, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

Here is everything worth considering before you start applying for probate with no legal expertise on your side:

What is probate?

Probate is the legal right to deal with the estate of someone who has passed away. To get this permission in most of the UK, you need to apply for a legal document called a Grant of Probate (in Scotland, it’s called a Grant of Confirmation). You also need to be an executor named in their will.

If there is no will, you are technically applying for a document called a Grant of Letters of Administration and to be the administrator of their estate rather than the executor.

Once you have successfully obtained probate, you have the right to access their bank accounts, sell any property, and generally handle their assets according to their will (or the Rules of Intestacy if there is no will).

Can I do probate without a solicitor?

Yes, you can do probate without a solicitor and many people do. If the estate is relatively simple, doing probate yourself can be the most cost-effective way to proceed.

That said, the process of applying for probate isn’t always straightforward. The role of executor or administrator of an estate comes with many responsibilities. It also opens you up to potential personal liability for any errors you make along the way. Even if you were trying your best.

Is probate difficult to do yourself?

This very much depends on the complexity of the estate.

You may be able to handle probate for a simple estate yourself. This would be the kind of estate with a low value or when all the property is owned jointly and the surviving partner will simply inherit everything.

When things like Inheritance Tax get involved though (the threshold for Inheritance Tax in the UK is currently £325 000), it becomes increasingly worthwhile considering getting at least some legal advice.

Should I do probate myself? Things to consider

There are a few vital issues to think about before you take on the challenge of doing probate yourself:

1) Paperwork

The job of applying for probate and then being executor or administrator of an estate involves a lot of paperwork. If you don’t find this easy, it’s important to prepare yourself or consider other options.

2) Legal complexity

The forms required to apply for probate can be completed by someone with no legal expertise.

However, working out things like who the beneficiaries of a will really are can be challenging. For example, what if a charity beneficiary has ceased operations since the will was written?

3) Personal liability

As the executor of the estate, you can be held personally liable for mistakes made during the administration.

For instance, if a creditor was not given sufficient time to claim repayment of a debt, you might have to cover that debt. You also have to ensure the correct Inheritance Tax is paid.

4) Obligation to notify creditors and pay debts

The estate is legally obliged to pay its bills. This might be actual bills, but may also be a mortgage or other debts.

As executor, you are obliged to give creditors a set period in which to step forward and make a claim on the estate. This can involve a great deal of investigatory work to track all debts down.

You are also obliged to advertise the death. This usually includes placing a death notice in The Gazette as well as other reasonable steps to spread awareness of the death.

5) Probate applications can be rejected

Though probate application forms can be completed by a layperson, they are not necessarily the easiest to understand for someone without a legal background.

Incorrect paperwork can lead to probate applications being rejected. You’ll then need to address these issues and apply again, usually leading to – at the very least – weeks and possibly months of delay.

6) Applications and actions can be contested

It is critical that you keep thorough records of your actions and the estate accounts if you are an executor. This is because the beneficiaries of the will have the right to contest any costs or actions they feel aren’t right.

When should I use a probate solicitor?

There are several circumstances in which it’s usually not a good idea to handle probate yourself:

  1. Relationship difficulties – trying to deal with the death of a loved one at the same time as complex legal affairs is unpleasant, leading many close relatives to stay clear of the probate process. The same is true if relationships between surviving family members are difficult.
  2. Complexity challenges – when there are many different assets, many different beneficiaries, or the estate has a large value, it gets progressively harder to be confident you’re meeting the legal responsibilities of an executor.
  3. Valuation or tax confusion – if Inheritance Tax needs to be paid, it’s an easy dividing line telling you it’s worth considering calling in legal expertise. The same is true of assets like property that need to be professionally valued if they’re not to be contested.

Can I start probate myself and then change my mind?

Of course, there’s nothing wrong with looking into the probate process a little to see if you feel you can handle it yourself and then calling in a probate expert to take over.

Doing probate yourself is often the most affordable way to handle the affairs of someone who has died. Yet probate solicitors and other specialists exist for very good reasons.

How about talking over your personal situation with an expert without any commitment?

Solicitors Near Me will find you a friendly probate specialist for free and with no obligation.

Tell us about the kind of advice you need today.

Probate Solicitors Near Me

To find a specialist probate solicitor near you, simply click the button below, enter a few details and we will soon connect you with a probate solicitor for FREE.

To be connected to a specialist probate solicitor near to where you live, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

 

Confirmation Scotland Large Estates

How To Do Probate Yourself

How To Do Probate YourselfAmidst the grief of the passing of a loved one, the complex legal process of probate is often the last thing you want to deal with. Yet it can minimise the costs associated with a death.

To be connected to a specialist probate solicitor near to where you live, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

Here’s everything you need to know about how to do probate yourself:

What Is Probate?

Probate is the legal right to manage the estate of someone who has died. Their “estate” is all of their assets – the property, money, investments, and personal possessions they owned.

In order to administer this estate, you need to apply to the Probate Office for either a:

  1. Grant of Probate – if the person who has died left a will. This grant gives you the right to access the deceased’s assets and follow the instructions in the will for their distribution.
  2. Grant of Letters of Administration – if there is no will, you can apply following what are called the Rules of Intestacy (which can be thought of as a sort of default will).
  3. Grant of Confirmation – if you are in Scotland, the probate process is slightly different and referred to as confirmation.

Not every estate needs to go through the probate process. For example, you won’t need to if all property is jointly owned and there is a survivorship clause.

Can You Do Probate Yourself Without A Solicitor?

Yes. There is no law forcing you to use a solicitor to obtain probate.

However, it is worth underlining that doing probate yourself can be time-consuming and complicated. You can also find yourself personally liable (that is to say, at the risk of needing to cover costs yourself) if mistakes are made during the process.

Only for a relatively simple estate is it a good idea to go ahead with applying for probate yourself with no legal expertise whatsoever.

How To Do Probate Yourself

If the estate is a complicated one, it’s definitely worth at least talking it over with a probate solicitor before you get started. But if you are sure you want to do probate yourself, here’s how to go about it:

1) Register The Death

In most of the UK, you need to register the death within five days. In Scotland, it’s eight days.

This is important to do not only legally but also because you will need multiple copies of the death certificate during your probate application.

2) Locate The Will

Next, confirm that there is a will and that you are named as one of the executors. The will should also explain who the deceased’s assets should go to and the funeral plans they wanted.

If there is no will or it doesn’t name an executor – or if the named executor is incapable for some reason – you can apply for that Grant of Letters of Administration. If successful, you then become the “administrator” of the estate instead of an executor.

3) Pay Inheritance Tax

Somewhat confusingly, you need to pay Inheritance Tax (IHT) before you can get your Grant of Probate document. This means you need to value all of the deceased’s assets and add them up, including:

  • Money in bank accounts and building societies
  • Property and land (these will normally need to be professionally valued)
  • Stocks, shares and other investments
  • Personal possessions
  • Potential negatives, such as debts they owed

The Inheritance Tax threshold in the UK is currently £325 000. If the deceased’s estate is valued at less than this, you won’t need to pay IHT – it counts as an “excepted” estate. If it is worth more than that threshold, you need to pay the correct tax. This can usually be done from the estate itself.

It’s also worth knowing that there are ways to increase this limit (such as the “residence nil-rate band” if property will pass to a direct descendant) or other ways an estate might be excepted from IHT (such as if all property is jointly owned and passes to the deceased’s partner).

You have six months from the end of the month in which the person passed away to pay all of the IHT that’s due. You can’t get probate until this is done.

4) Apply For Probate

Only now can you apply for probate. You can do this online or by paper depending on the estate.

5) Notify Relevant Parties

It’s also your job as executor or administrator to notify all relevant parties of the death. This means locating the deceased’s bank accounts, investments, utility companies they used, government bodies, and even any creditors. You will usually need to:

  • Search paperwork, files, and hard copies
  • Look for digital accounts and online platforms
  • Trace through My Lost Account and other similar services
  • Post a notice of death in The Gazette

6) Pay Off Any Debts

If the deceased owed money to any creditors (this includes things like their mortgage) then the estate is liable for paying it. It’s important to note that the deceased’s family is not liable for debts if the estate runs out of money.

There is a strict priority order in which debts need to be paid. If you don’t follow it, you can be personally liable for covering the costs if someone tries to claim something they’re owed later down the line.

7) Claim Any Life Insurance

One often-overlooked factor is that someone who has died may have had an unknown life insurance policy that can help cover any costs. This is one of the key things to look for when investigating the deceased’s estate.

8) Distribute The Remaining Assets

Finally, it’s time to distribute the remaining assets from the deceased’s estate in line with the wishes laid out in their will. If there is no will, you usually have to follow the Rules of Intestacy.

A common misconception is that the deceased’s partner is automatically due a share of their estate. Sadly, the law doesn’t recognise unmarried partners unless they are mentioned in the will.

The Best Tip For Do It Yourself Probate

As you can see, applying for probate yourself is a complex and potentially time-consuming process, but it is possible. The most important thing is to be systematic and very organised. Make notes. Make a plan. Keep records of where you’re at. If in doubt, legal advice is easy to access.

Want to talk through how to do probate yourself (or with a bit of advice)?

Solicitors Near Me can find you a helpful and friendly probate solicitor to chat with – for free and with no obligation.

Reach out to us today for a chat about your personal situation.

Probate Solicitors Near Me

To find a specialist probate solicitor near you, simply click the button below, enter a few details and we will soon connect you with a probate solicitor for FREE.

To be connected to a specialist probate solicitor near to where you live, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

 

Confirmation Scotland Large Estates

Do I Need Confirmation For A Small Estate In Scotland?

Do I Need Confirmation For A Small Estate In Scotland?Do I need confirmation for a small estate in Scotland?

What constitutes a small estate is actually defined by Scottish law as one with a total value under £36 000. Confirmation is the legal right to deal with the estate of someone who has died. But do you need confirmation for a small estate in Scotland?

The short answer is yes. But you can get free assistance to apply for it from the Sheriff Court.

If you need help with Confirmation in Scotland, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

However, it’s worth knowing a little more about confirmation and the application process before you choose how to proceed:

What is in an estate?

An estate is everything that a person who has died owned. In Scotland, this is broadly summarised by two groups:

  1. Heritable assets – their house, other property and land.
  2. Moveable assets – money in their bank accounts, personal possessions, shares and investments and so on.

What is the threshold for a small estate in Scotland?

The threshold for a small estate in Scotland is £36 000. If the estate is worth less than this, it is “small”. Any bigger, it’s a “large” estate.

Don’t forget that in Scotland the value of the estate doesn’t include any debts or other sums that the deceased owed.

What is the difference with a small estate in terms of confirmation?

The only real difference with a small estate when it comes to confirmation is that a small estate tends to be a simpler one.

The official known as the Sheriff Clerk is also able to help you apply for confirmation if it is for a small estate. They are not legally allowed to do this for large estates, so you’ll need to search out reliable legal expertise if the estate is valued over that £36 000 threshold.

Who deals with the estate?

The person who applies for confirmation is aiming to be “confirmed” as executor of the will if they are named in it. If there is no will or no named executor, the courts will usually appoint one – and you can apply for the role if you are a close family member (a set priority order of the deceased’s relations is set out).

If there is more than one executor – and there frequently is, because it’s sensible to name several in case any were to predecease the person whose will it is – they have different options when it comes to decision-making.

But before even a named executor can start dealing with the estate of someone who has died, they must successfully apply for confirmation.

How to deal with the estate of a person who has died

Dealing with the estate of someone who has died includes several tasks, including:

  1. Organise the funeral – it is often possible to access some funds from the deceased’s bank accounts to pay funeral costs even before you receive your Grant of Confirmation document.
  2. Prepare to inventory their estate – this will mean locating all of their banks accounts, any investments they have, and more.
  3. Apply for confirmation – before you are allowed to distribute their assets in line with the will or access more funds from their accounts, you need to obtain the legal right to do so. This is called confirmation.

Do I need a solicitor to obtain confirmation?

If the estate is worth less than £36 000 and there is a will, you will not always need a solicitor to help you obtain confirmation. The assistance of the Sheriff Clerk is usually invaluable here.

Yet it’s worth bearing in mind that the confirmation application process isn’t exactly simple. It includes:

  1. Paperwork – you’ll need to fill in several legal forms and send them to the Sheriff Courts. These can be contested either by the courts or others if they are incorrect.
  2. Inventory – it’s your responsibility to create an inventory of all of the deceased’s assets and their values.
  3. Pay Inheritance Tax – this needs to be the correct figure based on an accurate inventory. Otherwise, you leave yourself personally liable to pay costs later on. You need to pay the correct Inheritance Tax before you get confirmation.

If the estate is small and simple (that is to say, it doesn’t consist of many different assets – perhaps just a single bank account and some possessions) it might be possible to handle getting confirmation yourself.

But, while you don’t technically need a solicitor to obtain confirmation for a small estate, a legal expert can save you time and protect you from the worries of being personally liable for any mistakes later on.

Can I use a solicitor just for the difficult parts?

One potential solution is to find a solicitor just for the more complex parts.

In general, while you do need confirmation for a small estate in Scotland and while you can apply for it yourself, it’s often a good idea to at least talk it over with a legal professional first to make sure you won’t have any problems.

Want to discuss your particular situation with a specialist?

Solicitors Near Me will find you a friendly, approachable expert to chat with – for free and with no commitment.

Get in touch with us and tell us about the kind of advice you need today.

Contact Solicitors Near Me

To find a specialist solicitor near you, simply click the button below, enter a few details and we will soon connect you with a probate solicitor for FREE.

To be connected to a specialist solicitor near to where you live, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

 

Do I Need Confirmation For A Small Estate In Scotland?

Confirmation Scotland Large Estates

Confirmation Scotland Large EstatesConfirmation In Scotland – large estates

Getting confirmation in Scotland for large estates (those valued at £36 000 or more) is more challenging than for small estates.

For a start, the Sheriff clerk (who can assist you with small estates) is not allowed to help you here.

If you need help with Confirmation in Scotland , please either call us now on 0845 1391399 or complete a Free Online Enquiry.

That’s why getting legal advice from a solicitor or other legal professional is nearly always worthwhile when you need to get confirmation for a large estate. Here is what you need to know:

What Is A Large Estate?

In Scottish law, a “large estate” isn’t just a matter of opinion. It is an estate where the combined value of the assets of the person who has died is £36 000 or more.

This usually means that a house or other property is involved. On other occasions, there might be multiple bank accounts, investments, and more.

As the executor, you can be personally liable (i.e. you can end up needing to pay) for mistakes made during the process of closing the estate down. This is why it’s best practice to engage legal assistance.

What Is Confirmation?

In Scotland, confirmation is the legal right to administer the estate of someone who has died. This includes distributing inheritance to the beneficiaries following the wishes laid out in the will – or following the Rules of Intestacy if the person died intestate (without a will).

The process of applying for the legal document called the Grant of Confirmation (sometimes “certificate of confirmation”) is the equivalent of applying for probate (either a Grant of Probate or Grant of Letters of Administration) in England, Wales or Northern Ireland.

Why Do I Need A Certificate Of Confirmation?

Without confirmation, you will find it difficult or impossible to convince a bank to let you access the accounts of someone who has died and it is not legal to sell any property they may own.

Once you have a certificate of Confirmation, you can send the bank a copy. They will then allow you to remove the funds in preparation for distributing them following the will.

There are some circumstances where you might be able to do some limited things without confirmation. This might include paying funeral costs from the deceased’s bank account or accessing smaller amounts of money, for example.

However, this latter exception is less likely for a large estate.

Can You Apply For Confirmation For A Large Estate Without A Solicitor?

Yes, it is technically possible to apply for confirmation for a large estate without a solicitor. However, the Scottish Courts and Tribunals Service is not allowed to assist you, as they would for a small estate (one valued at under £36 000).

It’s worth reiterating how important this makes it to get legal advice you can trust. Without it, you are open to paying the costs for mistakes made in the process yourself.

The more complex and larger an estate gets, the more difficult and time-consuming it becomes to get confirmation for:

1) More Documentary Proof Is Needed

Without a solicitor, you will also need to provide additional documentary proof in the form of:

  • The death certificate
  • The will, if any
  • An extract of the will if it has been registered with the Sheriff Court of Books of Council and Session

2) Taking Inventory Of The Estate Is Harder

One of the requirements when applying for confirmation is an inventory of the estate. This is a list of all the deceased’s assets with an accurate valuation of each attached.

Do be aware that valuations can be challenged by the courts and you can be liable for mistakes made – for example – when paying the correct Inheritance Tax because of inaccurate valuations.

You don’t subtract the value of any debts the deceased owes from this inventory. However, you do need to be sure that you have included all of their:

  • Heritable property – including land and buildings.
  • Moveable assets – money in bank accounts, investments such as stocks and shares, and personal possessions.

3) Pay The Correct Inheritance Tax

In Scotland, most large estates worth over £325 000 are liable for Inheritance Tax. This needs to be paid at the same time as you apply for confirmation, or preferably before.

To determine how much this will be, the inventory needs to be completed and sent to the courts for processing (there is a fee for this even though it is mandatory).

Some estates are exempt from paying Inheritance Tax. This is only usually if the deceased lived permanently in another country for a long period before they passed away or if all the estate’s value above the £325 000 threshold will go to their spouse or certain types of charities.

Again, it’s worth talking to a specialist probate or confirmation solicitor to make sure you’re paying the correct tax.

Can I Apply For Confirmation For A Large Estate If There Is No Will?

Yes, you can still apply for confirmation for a large estate in Scotland even if there is no will.

However, if the deceased died “intestate” (without a will), there are additional steps required by the confirmation application process. You will need:

  • A Bond of Caution – necessary for all intestate estates, this is a kind of safeguard against executors applying for confirmation for an estate they’re not eligible for or trying to distribute inheritances to the wrong beneficiaries.
  • The dative petition process – is required to show that you are the closest relative to someone who has died intestate, and thus eligible to be confirmed as executor of the estate. This requires proving your identity to the court.

How Long Does It Take To Get Confirmation For A Large Estate?

It would not be uncommon for the executor of a large estate to take six months or possibly more to be confirmed.

The sooner you can get started (ideally with expert legal advice to help you), the sooner confirmation in Scotland will be granted for a large estate.

Want to talk to an expert about applying for confirmation for a large estate?

Solicitors Near Me will find you the perfect specialist – with no cost or obligation.

Contact Solicitors Near Me

To find a specialist solicitor near you, simply click the button below, enter a few details and we will soon connect you with a probate solicitor for FREE.

To be connected to a specialist solicitor near to where you live, please either call us now on 0845 1391399 or complete a Free Online Enquiry.

 

Confirmation Scotland Large Estates