12th June 2017
Royal London is calling on HMRC to change inheritance tax (IHT) rules on larger estates to allow executors more time to pay complex tax bills.
Under current rules, the executor of a will can manage a person’s estate after their death by using probate.
The process involves valuing the estate, paying any outstanding debts or taxes and distributing the estate in accordance with the deceased’s wishes.
The deadline due for IHT bills on an estate is 6 months after death.
However, the majority of estates can take between 6 to 12 months to complete as larger properties or shares can be complex and may need more time to be sold.
Other issues which could cause delays in selling assets:
- larger properties and different assets which need to be sold
- outstanding debts being paid off
- lost paperwork
- inaccurate record keeping.
Helen Morrissey, personal finance specialist at Royal London, said:
“People agree to be executors to ensure the wishes of a friend or family member are honoured after death. However, they are unwittingly leaving themselves open to footing what can be a sizeable inheritance tax bill.
“We are seeing more estates than ever subject to inheritance tax and larger estates can take a long time to wind up.
“Many executors may have no idea they could be responsible for finding the money for a large tax bill before money in the estate is available."