The Wealth Protection team have recently added extra value to their client-experience with the introduction of Grant-only fixed-fee service, applicable for estates exempt from inheritance tax.
The new scheme aims to provide a simple and cost-effective option for Personal Representatives who feel able to administer the estate but may require a legal eye when making the Grant application.
What is a Grant of Representation and why might I need one?
A Grant of Representation is a collective term for a Grant of Probate or A Grant of Letters of Administration.
A Grant of Probate confirms the validity of a Will and the Executor’s authority to act.
Likewise, a Grant of Letters of Administration confirms the authority of the Administrator to act where the deceased is said to have died intestate, i.e. there is either no Will or an ineffective Will.
In most circumstances a Grant of Representation is required before gaining access to assets of an estate in order to carry out the wishes contained in the deceased’s Will or, where the deceased died intestate, to distribute the estate according to the rules of intestacy.
How do I apply for a Grant of Representation?
Report to HMRC
An executor will need to accurately calculate and notify HM Revenue & Customs of the deceased’s assets and debts using a Form IHT205 or IHT400. In most circumstances a Form IHT205 is completed where an estate is exempt from inheritance tax. However, a Form IHT400 may be required where an exempt estate is more complicated.
Online or paper application
You can apply for a Grant of Representation online or by post using application form PA1P (if there is a Will) or PA1A (If there is no valid Will). Both methods of applying for a Grant of Representation set out various details about the deceased and their estate as well as the applicant’s entitlement to take out the Grant.
Any Will and Codicils (if applicable)
Probate court fee
The fee is currently set at £215 (or £155 for applications made by solicitors) if the estate is valued at £5,000 or over, plus £1.50 per copy. There is no fee where an estate is under £5,000.
What type of estates would qualify for the fixed-fee service?
Band A estates
A ‘Band A’ estate may consist of assets such as a share in a matrimonial home, bank accounts or savings, where the total value is less than £1million and is exempt from inheritance tax either because:
It is below the inheritance tax threshold of £325,000; or
It passes wholly to a surviving spouse or to charity.
The Grant application for this type of estate would consist of a completed Form IHT205 and a completed application online or by post.
Band B estates
This category would consist of estates of a surviving spouse valued between £325,000 and £650,000.
Despite exceeding the inheritance threshold, the estate remains exempt because it benefits from the transferred unused nil rate band from the first deceased spouse.
The Grant application for this type of estate would therefore consist of:
A completed Form IHT205
A completed Form IHT217 (used to claim a transfer of unused nil rate band for estates less than £650,000); and,
A completed application online or by post
Band C estates
These estates are more complex by virtue of the deceased’s assets or due to the availability of additional inheritance tax thresholds.
For instance, the estate may benefit from the unused nil-rate band of a predeceased spouse as well as one or more residence nil-rate bands. The residence nil-rate band is an additional threshold which applies specifically where the deceased’s main residence is inherited by their direct descendants, i.e. children or grandchildren.
‘Band C’ estates might also involve an interest in a trust or an extensive number of lifetime gifts.
The Grant application for this type of estate would therefore consist of a Form IHT400 and supporting schedules as well as the application online or by post.
Where schedules IHT403 (details of the deceased’s lifetime gifts) or IHT418 (details of trusts) are required, additional fees may apply.
Band A estates: £1,500 VAT, plus probate court fees. Band B estates: £2,000 VAT, plus probate court fees. Band C estates: £2,500 VAT, plus probate court fees.
What our service includes
Our fixed price includes production of the probate application forms and a 1 hour initial meeting.
Please note that additional fees may apply depending on the complexity of the estate, where more detailed estate advice is required. These fees will always be agreed and notified to you in advance.
What we need
A copy of the death certificate
A copy of a marriage certificate (if applicable)
When the death is of a second party to a marriage, the death certificate and Will for the spouse who has predeceased
The deceased’s original Will (if applicable)
The deceased’s National Insurance number and any tax reference number for the deceased (if applicable)
A brief family tree
A breakdown of the assets (including joint assets) of the deceased. The values given must be their value at the date of death. In addition details of any debts owed by the deceased, including funeral costs
Details of any lifetime trust from which the deceased benefitted, e.g. life assurance policies
A breakdown of any lifetime gifts made by the deceased (if applicable)
Details of any pensions or benefits who which the deceased was entitled
ID documentation for the intended Personal Representative(s)
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.