2010 - 2017
The figures given by banks will include interest accrued but not credited at the date of death. This is important for tax purposes.
Liabilities will also need to be ascertained. Credit card bills and the like are deductible for calculating the amount of the estate subject to inheritance tax. The funeral bill is a permitted deduction, as are reasonable expenses for `mourning' (clothes for the funeral).
Once all the figures have been ascertained, the application for probate may proceed. Usually it will be necessary to fill in a form called an IHT 200 for the Inland Revenue. There is a procedure called the 'excepted estates' procedure whereby estates below a certain level do not have to submit this form.
The limit below which this procedure applies is adjusted periodically. At the time of writing, it is set at a level equal to the inheritance tax threshold.
It is essential that the values set out in the IHT 200 are correct. There are stiff penalties for anyone who makes a statement known to be false or recklessly puts down a figure without making 'fullest enquiry' as to its correctness.
There are, of course, some assets where the value is very difficult to assess. I once dealt with a very big estate where the deceased had a fondness for modern art. One piece of sculpture, consisting of large pieces of granite, had had to be delivered by crane.
He had paid a lot of money for it but nobody wanted to buy it from his estate. Assessing the value for tax purposes proved extremely difficult. Shares in private companies can be very difficult to value, especially where the deceased was a 'key man'.
In such circumstances an estimate may be submitted together with details of enquiries made in an effort to obtain a value.
Where an estate is liable for inheritance tax, the Revenue expects the money to be paid up front. There are two types of assets for tax purposes: 'instalment option' assets and `non instalment option' assets. Land is an instalment option asset, for example, but cash in the bank is not.
The tax on the non-instalment option assets must be paid to the Cashier's Office of the Capital Taxes Office before the Probate Registry will issue the grant. The Cashier will stamp a receipt onto the form submitted with the IHT 200 and return it for submission with the oath for executors.