Beneficiaries seeking probate of a deceased's estate will now be able to use a simplified process of...
Beneficiaries seeking probate of a deceased's estate will now be able to use a simplified process of reporting to the Inland Revenue, providing the total sum of inheritance is no more than £240,000 and they do NOT have assets tied up in a "gifts with reservation" trust.
Changes to simplified reporting rules limit - from £220,000 to £240,000 - should now allow an additional 5,500 cases each year to obtain probate without needing to complete a full Inheritance Tax (IHT) return.
But one of the key requirements if a client wants to take the simpler probate route is the deceased is not allowed to have placed their assets in a "gifts with reservation" trust which the Revenue no longer allows the use of.
Changes to access rules of these Potentially Exempt Transfer (PET) trusts were announced on Friday 20th June, and outlawed with immediate effect the use of trusts which also allowed the benefactor to still have access to those assets or property for their benefit.
This should probate change should mean is beneficiaries will be able to access their assets quicker and without filing a grant of representation through executors or administrators - a process which is otherwise known as "excepted estates" and requires all assets be added together, including gifts, but without deducting debts.
But this new ruling could also means that anyone now holding such a trust will be subject to tighter scrutiny and longer delays in processing the probate application as a penalty for holding money which the Revenue can't access.
Specifics of the simplified rules will apply if the deceased died in the UK and:
Revenue officials point out that these rules do not affect Scottish rules, requiring an inventory of the estate to be produced with any applications for confirmation to an estate.
This inventory must continue to be completed and presented to the Sheriff Clerk in the normal way.
For more information, telephone the Probate hotline on 0845 234 1000 or email through the right-hand link.
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