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The Administration of Estates During COVID19
When an individual passes away, those they appoint as Personal Representatives (PRs) have a legal obligation to administer the deceased’s estate. Their role is to settle any outstanding debts and to ensure that the chosen beneficiaries receive their inheritances in accordance with the Will. In the absence of a Will then the intestacy rules would apply.
Covid 19 has been an unprecedented obstacle in the process and has made it more challenging for a PR to administer the estate within a reasonable time scale. Full lockdown in March and April froze the UK property market making the process even slower. If there is property to sell, the beneficiaries may have to wait even longer to see their inheritance.
As the UK eases out of lockdown, the property market is likely to see sales moving again but its still early days to really know the impact the pandemic will have in terms of pre coronavirus house prices, borrowing and how the market will be affected long term.
In light of the current climate, PRs should exercise care on sale of property and/or investments. It is prudent that they have discussions with the beneficiaries prior to any sale and that they are cautious of managing exposure to capital gains tax as investment portfolios recover in value.
In terms of obtaining a valuation, PRs should consider instructing a RICS valuer who should in turn liaise with HMRC. As PRs are liable for any Inheritance Tax payments, they can make a claim for loss relief on any interest accrued on land. In order to qualify, the land in question must form part of the estate and be sold on the open market to an unrelated party.
Further delays in the administration process can occur where confirmation of the tax position is being sought from the HMRC. Due to the pandemic, it is difficult for PRs to physically sign the necessary Inheritance Tax Forms because of social distancing policies. As a temporary measure, accounts and returns can be accepted without wet signatures subject to strict requirements and conditions.
At PWJ we recognise how beneficiaries, individuals and charities are likely to be impacted by the pandemic, and how they may need their inheritance faster than ever. Sadly, there is likely to be an economic downturn as a result of Covid 19 and many are likely to find themselves in a weaker financial position. Our offices remained open throughout the lockdown with a skeleton staff, and we are now beginning to see a return to semi-normal working in line with the current guidelines. We have put systems in place in order to enable us to carry on progressing probate applications as swiftly as possible, and we continue to regularly update our clients as to how we are operating through this crisis in order to make the process as smooth for them as possible.
If you would like to contact us in order to discuss how we can help you with a probate application, please telephone our offices on 020 8441 1556.