Knowing More about Probate and Inheritance Tax
Probate is the term that is used to describe the process that you may have to go through in order to apply for the right deal with a deceased person’s estate. Most people have to go through this process when they are dealing with a deceased person’s estate, which involves applying to the probate registry.
You may have to pay inheritance tax depending on the value of the estate and to who it is left to.
The probate registry will formally confirm that the will is valid or if there no will and ensure that you are legally allowed to deal with the estate in question. Once the probate registry is satisfied they will then issue a legal document that is called the Grant of Probate or the Grant of Letters of Administration if there is no will.
This legal document will enclose the names of the person or people that are responsible for dealing with the estate.
The ones that will need to apply for probate are most personal representatives or professional company can do it on their behalf.
You may not need to get probate if the person’s assets were in joint names, as it will automatically pass to the other joint owner or if the total value of the assets is less than £5000. You will need to be sure though and it is still a good idea to check with each bank and insurance company that is involved as they may have a limit on the number of assets that can be released without having to see a Grant of Probate.
You are able to apply for probate yourself or you can ask a bank, solicitor or a probate service to handle it for you.
If you are applying for probate yourself then you will need to complete a few application forms and then send these to your local probate registry.
When applying for probate there is usually a standard fee.
Once you have received probate you will then need to show these legal documents to banks, building societies and other such organisations to prove that they have the authority to deal with assets that the deceased person owned. This will also allow them to complete other tasks involved like accessing funds, sorting the finances and collecting and sharing the deceased person’s assets as per the will.
It can take some weeks to apply and receive probate. You may have to pay inheritance tax, depending on the value of the estate and who it is left to.
The probate registry will also not grant you probate until some or all of the inheritance tax has been paid.
The inheritance tax is usually paid by the personal representative using the money from the estate. If there is not enough money right away to pay the inheritance tax from the deceased accounts then the personal representative can apply for a loan.
There are usually other taxes that have to be settled by the personal representative. These taxes can include income tax and capital gains tax. Capital gains tax is payable if you inherit assets from the deceased and then later sell them.