Inheritance Tax  

How advisers can help executors after the death of a client

  • Understand the probate and estate administration process
  • Identify any relief that could be claimed
  • Learn how to advise beneficiaries on their options
CPD
Approx.30min

The administration also includes arranging the funeral, dealing with any property, and calculating and paying any IHT that might be owed on the estate. 

These tasks all typically fall to the executor.

Every estate is different, and the tasks involved in the estate administration process can vary from client to client depending on what assets and investments they held.

But it can be a lengthy and stressful process for executors.

As the deceased’s financial adviser, you will most likely have all the relevant information relating to the client’s financial situation. 

As a result, you’re best placed to provide support throughout the estate administration process and make life that little bit easier for the executors. 

Helping executors identify reliefs

Another area where advisers can offer valuable support is by helping a client’s executor understand any IHT relief that may be available.

Rising property prices have meant more estates than ever are likely to face an IHT bill. 

In fact, the amount of IHT collected is expected to reach £6.9 billion by 2023-24, an increase of £1.5 billion in just five years.

Helping executors to make use of any available IHT relief could save the beneficiaries, hundreds of thousands of pounds.

While everyone is entitled to a pass on £325,000 free of IHT (£650,00 for married couples and civil partners) - the threshold known as the nil-rate band - the estate might also qualify for an additional £150,000 (£300,000 for couples) of relief thanks to the residence nil-rate band. 

This is a difficult but an important calculation to get right. 

Unfortunately, it is not always clear cut how much relief an estate can claim, as certain tapering restrictions might apply in some cases where the estate is worth more than £2m. 

It is unlikely that an executor will be able to do this without your help.

On the Octopus Investments website you can use the residence nil-rate band calculator to get a feel of how much IHT might be owed on an estate.

Business property relief

If your client invested in shares that qualify for business property relief (BPR) and held them for at least two years before they died, their estate should be able to claim BPR, which is another way of reducing a potential IHT bill. 

Executors will need to make a claim for BPR when completing the IHT return for the estate. 

They need to do this using forms IHT400 and IHT412, which are available from HMRC.

Advising beneficiaries 

As well as helping executors with the administration of your client’s estate, you can also add value by advising the beneficiaries on their options once they inherit any investments. 

Typically, some beneficiaries will act as executors for a client’s estate as well.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. True or false, Advising beneficiaries on their options.

  2. True or false, If a will has been left, the administrator(s) will apply for Letters of Administration.

  3. What is involved in the probate process?

  4. If your client invested in shares that qualify for business property relief and held them for at least two years before they died, their estate should be able to claim:

  5. True or false, when completing a statement of truth, the executor or administrator is not required to make a promise that they have been truthful in their application.

  6. In England and Wales, the probate application involves completing a:

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Understand the probate and estate administration process
  • Identify any relief that could be claimed
  • Learn how to advise beneficiaries on their options

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Your Industry CPDSee my completed CPDSee all CPD