Wills and Probate Solicitors

In the recent case of Glyne T Harris as Personal Representative of Helena Norma McDonald (deceased) v HRMC (2018), Mr Harris, was found liable for a tax bill of £341,279. As the Executor of Ms McDonald, Mr Harris had an obligation to settle the bill, even though he had arguably complied with his duties. The difficulty lay in the way that he dealt with those duties and that is something all Personal Representatives should be aware of.

As the Executor, Mr Harris had transferred a beneficial entitlement to a beneficiary of the will, on the understanding that that beneficiary would settle the outstanding tax bill. This proved to have been the first mistake he made, since ‘best practice’ dictates that inheritance tax should be settled before beneficiaries are sent any assets owed. In this case, the beneficiary failed to settle the tax bill, which legally they were not obliged to do in any case, therefore, Mr Harris was left with the totality of the tax bill.

Despite the fact that Mr Harris had complied with his Executor duties as a whole, for inheritance tax purposes he was found personally liable for the tax amount. He appealed the liability claim, on the basis that he was not aware that it was one of his obligations as an Executor/Personal Representative. His claim was struck out on the basis that it is not a defence to be ignorant of one’s obligations. In short, Mr Harris should have settled the tax bill before transferring assets to the beneficiaries.

Inheritance Tax Expert’s Opinion

There appears to be a common misconception surrounding the role of an Executor/Personal Representative, especially when it comes to inheritance tax. I often come across clients who consider themselves perfectly capable of administering an estate. Whilst this may be true, it is more often the case that when an estate is taxable, individuals will have underestimated the complexity involved. This is when it is essential to instruct a solicitor that specialises in wills, probate and inheritance tax, to ensure all duties are complied with.

The role of an Executor requires great responsibility since they have a fiduciary duty to the beneficiaries to ensure the will is executed properly. This is only made more stressful when failure to do so may result in court action being taken against the Executor. Litigation of this sort can result in significant financial penalties to the Executor, or, as in the case of Mr Harris, the Executors may find themselves personally liable for a significant tax bill. Not least, the role can be entirely thankless, especially if a testator has not included a legacy for their Executor as a gift of thanks.

This is where instructing a solicitor can ensure compliance, as well as assurance that any stress involved will be minimalised.

Whilst the instruction of a solicitor results in costs, it is important to remember that these costs are normally covered by the estate. Most solicitors will also defer payment for any fees until the conclusion of the matter.

At Duncan Lewis Solicitors, our wills and probate department will assist you in administering the estate of a loved one. Our specialist team have a wealth of probate knowledge which can serve as a protection to you against any potential claims made by the beneficiaries to a will. Let us take the burden of estate administration away from you - call one of our specialists today.

Author, Caroline Roche, is a solicitor and Director in the wills and probate department. Her specialist experience includes, drafting wills; advising on inheritance tax due from an estate; gathering the estate when a loved-one has passed; dealing with both taxable and non-taxable estates, handling the affairs when a loved-one has died without a will.

Duncan Lewis Wills & Probate Solicitors

Duncan Lewis solicitors can advise at any stage of the probate process – and have considerable expertise in Executor’s Duties and the administration of estates (including high-value estates, estates where the deceased was a partner in a business and estates where there may be numerous beneficiaries).

Our specialist solicitors offer a comprehensive and personal service. Their expertise includes, drawing up wills; advising on inheritance tax, family law, property law, and international wills.

For expert legal advice on Wills and Probate and Executor Duties, call Duncan Lewis Probate Solicitors on 0333 772 0409.