Probate and inheritance tax

In England and Wales, inheritance tax (IHT) typically has to be paid when an individual’s estate (their property, finances and belongings) is worth more than £325,000 when they died.

We offer free initial advice and our Fixed Fee Complete Probate and Estate Administration service deals with Inheritance Tax, Income Tax, Capital Gains Tax and the Estate Administration process.

Suffering the loss of a loved one is hard enough, but having to deal with Probate and Inheritance Tax (IHT) at the same time is simply too much for many bereaved people; and we completely understand this.

We can take the burden off your shoulders at this difficult time. We take full responsibility for obtaining the Grant of Probate and dealing with the legal, tax, property and Estate administration; when you use our Probate Complete Service.

Do I have to pay inheritance tax?

In England and Wales, Inheritance Tax (IHT) typically has to be paid when an individual’s Estate (their property, finances and belongings) is worth more than £325,000 when they died.

The £325,000 figure is the current Inheritance Tax Threshold and is subject to change each year in the Budget. From April 2017 there will be an additional Inheritance Tax allowance in some circumstances for people who leave their homes to their children or grandchildren.

The current Inheritance Tax rate in England and Wales is 40% on anything above the current £325,000 threshold, however, it can be reduced to 36% if 10% or more of the Estate’s net value is left as a gift to charity.

What does probate have to do with inheritance tax?

Part of the Probate process is to get the Grant of Representation, which confirms the legal authority to administer the Estate. However, before this can be done, it is necessary to value the entire Estate of the deceased, and to calculate any Inheritance Tax due.

The correct Inheritance Tax forms must be obtained, completed and submitted to HMRC (HM Customs & Revenue) or the Court. As part of the Grant of Representation application you must show either that you have paid any Inheritance Tax due, or that there is no Inheritance Tax to pay.

When you choose our Probate Complete Service we will take care of the relevant tax-related matters (excluding VAT) as part of the administration of the Estate. Benefits we provide include a face to face discussion with a Probate Consultant at home and ongoing advice and support for Personal Representatives.

We can also pay all the costs of a Co-op Funeralcare funeral, providing the Estate owns sufficient assets which can be sold in due course to repay our costs.

If inheritance tax is payable

The Grant of Representation will not usually be issued until the Inheritance Tax (IHT) has been paid to HMRC. This can potentially cause a delay in the administration of the Estate.

You will normally be expected to pay 10% of the tax due on the value of property and shares plus all of the tax due in respect of the rest of the Estate. This tax payment should be made within six months of death, with the additional tax in respect of the property and shares payable in yearly instalments over a ten-year period, or as soon as they are sold. Interest will start to accrue on any outstanding Inheritance Tax after six months from the date of death.

If it comes to light that there are further assets in the Estate, or the value of the Estate has not been correctly stated, it may be necessary to provide HMRC with a corrective account and pay any additional tax due, or reclaim any tax that was overpaid.

Authorised and regulated by the Solicitors Regulation Authority

Probate Estate Administration in England and Wales is not a reserved legal activity which means that unregulated providers can offer Probate Estate Administration services regardless of whether they are insured, experienced or qualified to provide a full Probate service.

Co-op Legal Services is the largest provider of Probate and Estate Administration services in England and Wales, trusted to deal with over £1.3 billion in Estates annually.

Our Probate team includes over 170 staff of specialist Probate Solicitors, Lawyers, Case Handlers, Advisors and our national network of Probate Consultants; all of whom only deal with Probate.

Co-op Legal Services is a trading name for Co-operative Legal Services Limited which is authorised and regulated by the Solicitors Regulation Authority, giving you peace of mind knowing that your Probate affairs are being dealt with by a regulated organisation and by a brand name you know and can trust.

Co-op Legal Services has over 600 staff working in different businesses with offices in Manchester, Bristol, Stratford-upon-Avon, Sheffield and London.