The short answer is no. If the estate is small (less than £36,000) and there is a Will, it can all be done without the help of a solicitor. However, even the most straightforward estates can be difficult to wind up when you are unaware of the legal procedures and duties you must comply with. At Wilson & Fish Solicitors, we specialise in Executry and Probate matters. If you need help when winding up an estate, please do not hesitate to contact us for help.
This page outlines the steps necessary to obtain Confirmation, and ultimately wind up an estate, in Scots law. Please note that this is intended to provide a general overview – for tailored advice on all aspects of winding up the estate of a deceased person in Glasgow, or throughout Scotland, contact us today.
How to wind up an estate in Scotland
- Obtain copies of the death certificate.
- Review the deceased's Will, identify the Executors of the Will and check they are able and willing to act.
- If the deceased did not leave a Will, ascertain who can act as Executor (usually the spouse or next of kin).
- Identify the deceased’s assets (and liabilities), e.g. house (and mortgage), car (and loans), bank accounts (and overdrafts), credit card accounts, investments, insurance policies, etc.
- Advise banks, insurance companies, etc. of the death and have the assets valued.
- Prepare an inventory of the deceased's assets and liabilities. Send it to the Executor for approval. Complexities may arise if the deceased had, for example, multiple investments and/ or foreign assets. It is crucial that the inventory is properly prepared, as Inheritance Tax is calculated based on the value of the deceased’s assets.
- If the estate appears to be worth more than £325,000 (i.e. the Inheritance Tax (IHT) threshold), make arrangements to borrow funds to pay the IHT liability before Confirmation can be issued.
- Pay Inheritance Tax. The general rule is that any assets in the estate over £325,000 are subject to 40% IHT. However, there are numerous exceptions. The threshold doubles to £650,000 for a married couple (provided that the first spouse who dies leaves their entire estate to their partner). Various tax reliefs may apply. For example, as of April 2017, where someone dies and their estate is above the standard IHT threshold, an additional threshold may apply before any tax is due. This is known as the residence nil rate band (RNRB) and the current extra amount is £100,000 for each spouse, increasing to £125,000 in 2018. Those who have received gifts from the deceased in the seven years before their death will have to pay IHT if the cumulative value of the gifts was over £325,000. Calculating IHT liability can be very complicated, and it is particularly useful at this stage to have the guidance of a solicitor in creating an accurate inventory and calculating IHT.
- Complete the Sheriff Court forms required to apply for Confirmation and submit them to the Sheriff Court. Arrange and prepare a Bond of Caution if there is no Will. Confirmation is a legal document authorising the executors to distribute the deceased’s assets.
- When the Certificate of Confirmation is received from the Sheriff Court send it to each bank or company holding the assets. A withdrawal authority signed by the Executor who has obtained the grant (“proved” the Will) will have to be submitted to the appropriate financial institution, and final income tax certificates and closing statement should be requested. In return, the organisations will release the deceased's assets to the Executors and close or transfer the deceased's accounts and files.
- Deal with HMRC questions concerning the value of assets or liabilities of the estate. Agree final figures with them. Report any additional assets or liabilities that have come to light since Confirmation was granted.
- When all the assets are collected and six months have passed since the date of death, pay the debts, including any unpaid income tax and capital gains tax relating to the deceased's income up to the time of death.
- Prepare an income tax return and complete it with details of the income of the estate to the end of the tax year during which the deceased died. Pay any tax due.
- Complete and submit Capital Taxes Office for Form IHT30 (Application for a Clearance Certificate); await the discharge certificate from HMRC.
- Pay any specific legacies. Distribute the estate to the beneficiaries. Obtain a formal discharge from each beneficiary.
- Obtain discharge of Legal Rights if required.
- Draw up estate accounts for approval by the Executor and residuary beneficiaries. Issue HMRC Form R185 (Certificate of Deduction of Income Tax) to the residuary beneficiaries showing their shares of the income of the estate and the tax deducted from it during the tax year.
- Cheques representing the distributions for the residuary beneficiaries can now be sent out. A receipt should be obtained from each beneficiary. In some cases interim distributions may have been paid at an earlier stage, but only if the Executors were certain that there would be sufficient assets to pay all the liabilities.
- When all cheques have cleared, close the Executors’ account.
- The administration of the estate is now complete. All accounts should be saved for 12 years.
Why do I need a solicitor to obtain Confirmation?
Obtaining Confirmation and winding up an estate is a lengthy, complicated process. It can be difficult for those without a legal background to complete some of the steps listed above, such as calculating the IHT payable on an estate, simply because of the complexity of the relevant legal rules. The key benefits of using a solicitor to obtain Confirmation are saving time and, of course, ensuring that you do not have to focus on legal practicalities during a difficult time.
If the estate is large (over £36,000), Sheriff Court staff are prohibited from assisting those applying for Confirmation, although some help may be available for those dealing with small estates. As the Executor of a large estate is legally responsible for errors in obtaining Confirmation, it is prudent to seek legal advice if you are unsure about any aspect of the winding up process.
At Wilson & Fish, we aim to provide an efficient and personable service in obtaining Confirmation, and during the entire process of winding up an estate.
It is possible to use a solicitor for only part of the winding up procedure. This can be divided into three main parts: firstly, procedures carried out prior to obtaining Confirmation; secondly, applying for Confirmation; and, finally, distributing the assets and meeting liabilities after Confirmation has been obtained. You may, for example, feel that you and your family members are best placed to create an inventory and obtain funding to pay IHT before applying for Confirmation, but have concerns regarding the Sheriff Court procedures and forms required to obtain Confirmation.
Please do not hesitate to contact us if you require assistance with particular aspects of winding up an estate. We understand that friends and family members may wish to carry out various steps themselves, and are very happy to work with you to ensure that your needs are met.
Wilson & Fish Expert Executry and Probate Solicitors Glasgow, Scotland
Contact us today on 0141 413 9031 or fill in our online enquiry form for advice from our solicitors on any aspects of Executries or Probate. Based in Glasgow, we help clients throughout Scotland including Ayrshire, Edinburgh, Aberdeen, Dundee, Paisley, East Kilbride and Stirling.
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