Guidance for Executors

How you can help us

In your role as executor PDSA will need your help with the following:

1. We would be grateful if you would let us have the following details of the person who has passed away:-
   - Full Name
   - Last known address and any other recent addresses
   - Date of Will
   - Date of Death
   This information enables us to ensure that we do not post any mail or literature addressed to our late benefactor, as we do not wish to cause any distress or offence.
    
2. Beneficiaries who have been left a share of the estate are entitled to a copy of the will, so we would be grateful if you could let us have a copy as soon as possible.
    
3. If PDSA has been left a share in the estate it would be extremely helpful if you could also send us a list of our late benefactor’s assets and liabilities as at the date of death (and their values) as there may be tax implications to be considered.
    
4. If you encounter any problems with the administration of the estate, or receive notice of any claims against it, please feel free to get in touch with us immediately. We will be happy to offer guidance or assistance wherever possible.
    
5. Of course, no payments should be made to any one other than in accordance with the terms of the will.
    
6. Beneficiaries always appreciate regular progress reports, and interim payments whenever possible.
    
7. Please ensure that all money you receive is placed in an interest bearing account until it is distributed to the beneficiaries. You should, in any event, keep a written record of all amounts that you receive and all payments that you make. When you are ready to make the final payments you should send a copy of these ‘estate accounts’ to all of the beneficiaries who were left a share of the estate. It would be advisable not to make the final payments until those beneficiaries have approved the estate accounts.

Dealing with specific matters

Property

If the estate includes a property please ensure that it is fully insured and all the insurer’s requirements as to security are satisfied. Please liaise with the beneficiaries who have been left a share of the estate as to how the property should be marketed, at what price, and what offers should be accepted.

We advise that marketing recommendations should be obtained from professionally qualified agents or surveyors.

Income Tax and Capital Gains Tax

We have prepared advice concerning issues relating to Income Tax and Capital Gains Tax which we generally provide to solicitors acting on behalf of executors. If this requires further explanation, please do not hesitate to contact us.

As a registered charity PDSA benefits from valuable tax concessions that have the effect of increasing the generous gifts left to us by our benefactors. We are able to reclaim the tax paid on our share of residuary income, and it is possible to avoid the payment of Capital Gains Tax in certain circumstances.

This is not, however, an automatic process. Therefore, this is to remind you of your legal duties, and also to assist you in carrying them out. For further guidance, please do not hesitate to telephone of e-mail a member of our legacy team.

Income tax

In accordance with Section 700 Income and Corporation Taxes Act 1988 legal personal representatives are required to furnish beneficiaries with statements showing the income earned by the residue of the estate.

Please provide form R185 (estate income) for each tax year during the administration of the estate in which we have received a ‘sum’, showing our share of all net interest and dividends credited (including interest and dividends accrued as at the date of death) to the deceased’s assets after the date of death and to the executor’s investments.

Income tax forms are available from the Inland Revenue website. There is also a telephone number available at HRMC Trusts, Edinburgh which is 0131 777 4030.

Capital Gains Tax

Exemption is available to charities under the provisions of Section 256 Taxation of Chargeable Gains Act 1992. If an executor sells assets forming part of a charitable bequest and capital gain is expected, exemption will not be available unless the executor has, with the consent of the charity, appropriated the asset to the charity prior to the date of sale. The executor is then deemed to dispose of the assets in the capacity of ‘bare’ trustee for the charity, and the exemption can be applied.

Inheritance Tax

When Inheritance Tax is payable, please be aware that complex rules apply to the allocation of the tax payment. Details of the Inheritance Tax calculations should be included in the estate accounts.
 

Summary

Beneficiaries left a share in the estate are entitled to:-

• a copy of the will and any codicils
• Estate Accounts showing capital and income receipts and payments
• Statement of Income (Form R185 (Estate Income)).
   

Beneficiaries left a share in the estate are assisted by:-

• regular progress reports
• consultation over major decisions (e.g. sale of a property) and problems (e.g. claims against the estate)
• interim payments
   

PDSA is grateful to you for your assistance in carrying out the wishes of our benefactor.

The following are notes of guidance provided by the Institute of Legacy Management