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Duties of an Executor - Inheritance Tax

Duties of an Executor - Inheritance Tax

An executor is the person who has responsibility for winding up and administering a deceased person’s estate. There a number of important stages to this process, including acquiring Confirmation, settling any bills and taxes, paying any legacies and distributing the estate in terms of the Will.

One important tax that the executor will be responsible for paying is Inheritance Tax (IHT). Until any IHT liability is identified and paid, the executor cannot proceed to obtain Confirmation and distribute the deceased’s estate in line with the wishes expressed in the Will.

IHT is liable on estates with a value of over £325,000. There will normally be no Inheritance Tax to pay if either:

  • the value of the deceased’s estate is below the £325,000 threshold; or
  • the deceased’s will leaves everything to their spouse or civil partner, a charity or a community amateur sports club.

If the deceased is married or in a civil partnership and their estate is worth less than their threshold, any unused threshold can be added to their partner’s threshold when they die.

The standard IHT rate is currently 40% and is only charged on the part of the estate that is above the threshold.

It is important that the executor makes an accurate valuation of the deceased’s estate, as this will determine whether IHT is payable. If the estate is liable for IHT the executor must start paying it by the end of the sixth month period after the person died. Timely payment of IHT is important, as HMRC can charge interest on the amount of tax outstanding.

Contact our Executry (Probate) Solicitors Glasgow & Scotland

The role of executor can be complex and time consuming, and expert legal advice is always recommended. To find out more about our executry services, contact our specialist lawyers today.