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10 Wills and Probate

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1. Introduction

2. Why should I make a will?

3. What makes a will valid?

4. Who can be a witness?

5. What does an executor or administrator do?

6. What is probate?

7. Will I have to pay inheritance tax?

Whether or not you, as the executor, have to pay inheritance tax out of the estate depends on:

  • how much the property and belongings of the dead person were worth when they died;
  • the value of any trust from which the dead person benefited;
  • the value of certain gifts the person made in the seven years before they died, or longer if they 'reserved an interest'. (An example of reserving an interest would be if they gave away their house on the condition that they were allowed to live there free of charge or for very low rent until they died.)

If all these add up to more than a certain amount (called the 'nil rate band'), the estate has to pay inheritance tax at 40 per cent on the sum of money above this amount. The amount is reviewed every year.  It is £300,000 for the year April 2007 to March 2008 and will rise to £350,000 by April 2010. 

Not all gifts made within the seven-year period have to be included in the tax calculations. All gifts between husbands and wives are exempt from tax, as are those between same-sex partners in a registered civil partnership (see 'Same-sex relationships'). You can also make exempt gifts in other ways, including:

  • a single gift of £3,000 each year;
  • any number of 'small gifts' of under £250 each to different people;
  • gifts to charities or political parties;
  • £5,000 to your child if they are getting married; and
  • gifts that can be described as 'normal expenditure' out of your income (which means, for example, that it would not reduce your standard of living).

If you give away your house but continue to live in it without paying a proper rent (called 'reserving an interest'), the value of the house will have to be included in the inheritance tax calculations when you die, even if you made the gift more than seven years before your death.

Inheritance tax is complicated, so you should get specialist legal advice straight away if you are an executor and the Probate Registry tells you that you may have to pay inheritance tax. The cost of legal advice will be paid out of the estate. If you get the calculation wrong without having taken advice and you pay the beneficiaries without paying the right amount of tax, you may have to pay what is owed out of your own pocket.

The executors or administrators are responsible for paying any inheritance tax that is due out of the assets of the estate, and it is due six months after the end of the month in which the person died. Some or all of the inheritance tax will have to be paid before you can obtain probate or letters of administration.

Same-sex relationships
Same-sex (gay or lesbian) couples who have registered their relationship as a civil partnership have the same tax advantages as married couples. Similarly, if a civil partnership breaks down, the couple face the same legal problems as a married couple (though a legal separation is called a dissolution rather than a divorce). 

8. Who takes charge if there is no will?

9. Who gets the estate if there is no will?

10. What can I do if I think there is something wrong with the will?

11. What can I do if I think the will is unfair?

12. What if there isn't enough money to pay for the funeral?

13. What if there isn't enough money to pay the person's debts?

14. Terms used in wills and probate matters

15. Further help

16. About this leaflet

This leaflet is published by the Legal Services Commission (LSC). It was written in association with Paul Elmhirst, a solicitor specialising in wills and probate.

Leaflet version: July 2007

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