What if I am an executor or personal representative?
If you are an executor or personal representative, you will have various duties to perform when the person whose estate you are to deal with dies. You will normally know that you are someone’s executor, as they will have appointed you as such in their will, and are likely to have told you this.
What is a will and what is intestacy?
It is important to make a will, because a will means that you can decide who gets what, rather than leaving it up to the law. You appoint one or more people to be an executor or personal representative in your will. This can be a member of your family, a friend or professional person, such as a solicitor. More information on wills, grants of representation (probate, or ‘confirmation’ in Scotland, and ‘grant of probate’ in Northern Ireland) can be found in the ‘wills, probate and inheritance’ section of GOV.UK.
If you die without making a will, this is called dying 'intestate'. If you die intestate, your estate is divided up between your spouse or civil partner and other family in accordance with the law. This may be different from your own wishes. It also means that some people that you want to benefit from your estate (for example, a partner you are not married to or in a registered civil partnership with, or friends) might get nothing. More information on ‘intestacy – who inherits if someone dies without a will?’ can be found on GOV.UK.
Note – in Scotland, whatever a will says, there are ‘legal rights’ that can be claimed by certain people, such as, the surviving spouse or civil partner and surviving children. You can find more information on the Scottish Government website.
There are also laws affecting other parts of the UK under which family or dependants of a deceased person can ‘contest’ the will if inadequate provision has been made for them in the deceased’s estate. This is a complex area of law and legal advice is likely to be needed.
There is more information in the section ‘tax and writing a will’.
What does an executor, administrator or personal representative do?
If someone has made a will and named you as an executor in the will, you are the person who will deal with the estate of the deceased.
If someone has died intestate and you are dealing with their estate, you are known as an administrator. In Scotland, the person who deals with an intestate estate is called an executor.
The executor or administrator of a deceased person's estate can also be called their 'personal representative'.
If you are an executor or administrator, you have responsibility for:
- collecting together all the deceased’s assets including any debts;
- paying all bills still outstanding at the date of the deceased’s death;
- paying funeral and any other post-death expenses.
You also have to deal with the payment of any taxes due, including income tax and inheritance tax and you are also responsible for completing tax returns or repayment claims.
Personal representatives normally have to obtain a grant of representation. If you are an executor this will be a grant of probate. You can find more information on obtaining probate on GOV.UK. In Scotland this is known as confirmation. You can find more information on obtaining confirmation on the Scottish Government website.
If you are an administrator for someone who died intestate you will have to obtain Letters of Administration.
The GOV.UK website has an inheritance tax customer guide which is intended to help executors as well as a guide about what to do after someone dies and there is a general section on death and bereavement on GOV.UK. You may also wish to talk to someone on HMRC's Bereavement Helpline. If the deceased lived in Scotland, you might find the guide 'What to do after a death in Scotland' helpful, on the Scottish Government's website. If you live in Northern Ireland, similar information can be found on the nidirect website.
What is a beneficiary?
You are a beneficiary if you are either:
- named in a will as someone who will receive assets or cash from the deceased’s estate; or
- someone who is entitled to receive assets from the estate of a person who has died intestate.
The deceased may leave you something specific, for example their house, or they may just leave you a share of what is left after all other gifts, tax and expenses have been paid – this is known as a share of the ‘residue’.
The executor may pay out some income to one or more beneficiaries during the time that they are administering an estate. If they do, they need to give the beneficiaries a certificate each tax year showing the income paid and any tax deducted. The form is called an R185. You can find the form on the GOV.UK website.
If you are a beneficiary and the executor pays out some income to you, you will need to report the income to HMRC each tax year. You can do this by including the income and any tax deducted on a self assessment tax return if you have to complete one or on any repayment claim.
How do I deal with the tax affairs of the deceased and their estate?
Firstly you need to contact HMRC so that they know about the death and with whom they will need to correspond regarding any matters arising in connection with the estate. The procedure you need to follow is slightly different, depending on where in the UK the deceased lived.
Inheritance tax might be due depending on the value of the deceased person’s estate and gifts they made during their lifetime.
Income tax for the deceased
In all cases, you will need to settle the deceased’s tax affairs up to the date of death. Once HMRC have been notified of a death, either through the ‘Tell us Once’ service or personally, the following should happen:
- HMRC will send a letter to the executor, personal representative (PR) or – if not known – the last known address of the deceased. The letter explains the process and that a P800 tax calculation will be sent once HMRC has received the final information from the pension providers, employers, Department for Work and Pensions (state benefits) etc.
If the deceased had earnings or pensions that were taxed under Pay As You Earn (PAYE), it is likely that they will have paid too much tax in the tax year of their death. This is because under PAYE, you are only given part of your tax-free personal allowance each month as the system assumes that you will be paying tax evenly across the year. When HMRC issue the P800 tax calculation, it will show any refund due. More rarely, there is an underpayment that will need to be paid out of the deceased’s estate.
The executor or PR must check the P800 tax calculation or simple assessment against the deceased’s records. If they cannot agree with it, they must make contact as soon as possible with HMRC and discuss the matter.
Otherwise, HMRC should give information about when and how the repayment is to be made, or how payment is to be made.
Those in self assessment will receive a letter from HMRC according to their individual circumstances. In most cases the executor or PR will be asked to complete a self assessment tax return for the period from the last 6 April to the date of death. You do not have to wait until after the end of the tax year in which the death occurred to complete the self assessment.
It is not unusual to see errors in calculations and it really is important to check them over carefully. You should:
- Check the figures against the final statements from pension providers, employers, DWP, etc.
- Check income from savings, as the P800 or simple assessment may show the previous year’s savings income.
- Check if any ‘adjustments’ listed are correct.
Check whether the deceased had claimed all reliefs and allowances, and whether any claim can now be made. Particular points to note are that:
there might be a surplus in married couple’s allowance to be transferred from the deceased to a surviving spouse or civil partner (where one of them was born before 6 April 1935);
the marriage allowance could still increase the deceased’s personal allowance if their spouse or civil partner had transferred part of their allowance to them before death, and on or after 29 November 2017 claims may be made by the personal representatives of a deceased spouse or civil partner for any of the previous four years during which deceased was alive and married to (or in a civil partnership with) the survivor;
the blind person’s allowance might not have been claimed by someone who is severely sight impaired.
- Question anything that does not make sense.
Income tax for the estate
If the deceased’s estate receives any income after the date of death, you may need to complete tax returns or repayment claims. You may have to complete a tax return for the period after the date of death if the tax position of the estate is complex or if the tax liability is significant – this will not be a personal tax return, but a trust and estate tax return. Find our more on our page ‘How is an estate taxed during administration?’
What happens if the beneficiaries decide that the estate would be better divided differently – Deeds of Variation?
If all the beneficiaries are of full age and agree, it is possible for them to vary the way an estate is paid out; or it is possible for some beneficiaries not to claim their legacies or ask that they be paid to someone else if they do not want them. In order to do this, they have to draw up a written variation, sometimes called a deed of variation (although the document does not have to be in the form of a deed).
If they do so within two years of the date of death, the variation may take effect for capital gains tax and inheritance tax purposes as if it were made at the date of death, but the signatories must specify for which tax purposes the variation should apply.
If the changes result in further tax being payable, the personal representatives must sign the document as well as the beneficiaries, but they may decline to do so if insufficient assets are available to pay the extra tax. They must also notify HMRC within six months of the date of the variation and send them a copy of the document.
These types of deed can be useful for paying less inheritance tax and capital gains tax, but they have no effect for income tax. It is necessary to say in the Deed of Variation that it is to apply for inheritance tax and/or captial gains tax or neither as required.
If there are any unborn beneficiaries or any beneficiaries who are minors – below the age of 18 – it will be necessary to obtain a court order to vary the will where the change might have an adverse effect on that beneficiary's share of the estate.
What happens when an estate is wound up?
Once all taxes have been paid, and all other matters relating to the estate have been settled, the executors can then distribute the estate to the beneficiaries under the terms of the will. In Scotland, this is subject to claims being made according to ‘legal rights’. There is more information on legal rights on the Scottish Government website. This then completes or 'winds up' the estate.
What if I do not want to be an executor or personal representative?
If someone has died and appointed you as an executor in their will, but you do not wish to be an executor, you do not have to. Instead, you can ‘renounce’ your role as executor. In order to renounce your role as executor, you need to sign a deed of renunciation and submit it to the Probate Registry.
If you wish to renounce your executorship, you must do so before doing anything that could be considered to be part of the executor’s role. If you carry out any duties of an executor, you cannot renounce the role, although you can delegate the role to an adviser.
If the will appointed other executors as well as you, they can usually apply for probate and carry out the duties without you. If the will did not appoint any other executors, then someone must apply to court to be appointed as administrator of the estate.
Be aware that if you renounce your role as executor, you give up your right to be involved in the affairs of the deceased’s estate entirely.
Where can I find more information?
There is more information on what to do if you are an executor or personal representative for someone who lived in England or Wales on the GOV.UK website: 'wills, probate and inheritance' and 'what to do after someone dies'.
If the deceased lived in Scotland, you should read the guide on the Scottish Government website.
If the deceased lived in Northern Ireland, you should read the guide published on the nidirect website.
If you do not know where the deceased put their will, GOV.UK offers limited guidance on locating a will. You should try searching through the deceased’s possessions and correspondence, and contact any solicitors they may have dealt with in the past from letters you find. Sometimes, the deceased might have asked their bank to store documents for them, so that is another place to check. If made through a solicitor, the existence of a will and its location may have been noted with the ‘National Will Register’ which is endorsed by The Law Society. If no original will can be found, in some circumstances it is possible to prove a copy of a validly executed will (this may be done, for example, if the deceased had given their executor such a copy). Ultimately, if no will or copy of a will is found, or a will is found but is invalid (see the ‘Making a will’ guide on GOV.UK – part 3 – for what makes a valid will), the intestacy laws will apply. See also our ‘Tax and writing a will’ guide.