• 2 min read

Why use a solicitor to administer an estate


Although the assistance of a lawyer can be seen as expensive, the benefits of obtaining proper advice can often out way the cost involved, sometimes substantially.

There are various guides online which aim to help people with ‘DIY’ inheritance tax or probate paperwork, but these guides may not consider all family and financial circumstances, so could be risky.

Mrs A died in August 2021 and by the terms of her Will she appointed her nephew and her niece as executors. She had separated from her husband many years ago and it was thought that they were divorced. They had no children and her estate was divided between her nephews and nieces.

The estate was valued at £450,000 and Mrs A had her full Inheritance Tax (IHT) Nil =Rate Band available (not having made any gifts in the 7 years leading up to the date of her death) to offset against the value of her estate. Although she had property which she had resided in, Residence IHT Nil Rate Band relief was not available as she had no children or further descendants to gift that property to.

With the nil rate band deducted the potential chargeable estate was £125,000 and taxed at 40% the total IHT charge was £50,000.

When the clients came to me, they had already completed the inheritance tax paperwork on this basis and asked me to examine it. Whilst examining it, I asked them for confirmation that Mrs A and her husband had divorced. No evidence could be found. It then became evident that they had not, in fact, divorced although the husband had started a new relationship. A Will for the husband was then discovered. This Will gifted £4,000 to Mrs A. The husband died in 2016. The family felt that this small gift would not create a significant IHT benefit. However, as the deceased’s husband’s estate was only valued at £92,000, and £4,000 went to Mrs A, the available IHT relief to be transferred to Mrs A’s estate was £237,000.

This resulted in an available IHT Nil Rate Band to Mrs A’s estate of £162,000 which then resulted in no IHT being payable. Her estate therefore saved £50,000 in IHT.

IHT laws are complex and it is not uncommon for scenarios to arise which would give rise to an IHT saving, which had not otherwise been thought about.

HMRC will not provide any guidance or make any suggestions to assist in reducing a tax bill and it is essential that proper investigations and proper advice is sought. If you would like to speak to someone regarding estate administration, please give us a call on 0800 2800 421 or contact us here.

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