HM Insights

What is in my estate for Inheritance Tax purposes?

ITV's latest comedy drama "Finding Alice" had many of us gripped to our televisions. The show's plot raises the importance of understanding what makes up a deceased person's estate for inheritance tax purposes.

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Keen viewers will appreciate that the myriad of assets left behind by Harry make it not only stressful for those dealing with the estate administration but also a logistical nightmare to organise.

How is the estate value assessed when a person dies?

When a person dies and Confirmation is required, an inventory must be collated by their executor detailing every asset, and its value, at the point the individual passes away. Normally this will include the balances of personal bank accounts and any interest in property that the deceased held when they died. All other assets, such as shareholdings or vehicles, are also required to be accounted for when calculating the total value of the estate. It is important to remember that this is a non-exhaustive list and an executor must make all necessary investigations to ensure the inventory of assets is an accurate and complete reflection of what the individual owned when they were alive.

A main purpose of collating a snapshot of the individual's finances at date of death is to determine whether or not the estate will have to pay inheritance tax as a result of its value. Once an accurate representation of the deceased's estate is complete, an application is made to the Sheriff Court to obtain Confirmation and allow the appointed executor(s) to distribute the deceased's estate.

What can I do to help my executor?

The process of collating all the necessary information can be lengthy as it requires the executor(s), or their nominated solicitor, to enquire to each individual company (e.g. bank) to obtain date of death valuations for each asset owned. Despite not being entirely accurate, it can be useful to keep a log or spreadsheet of your assets to ensure that whoever is dealing with your affairs after you pass away knows who to contact for necessary information should you unexpectedly pass away.

As Alice proves, dealing with the unexpected loss of a loved one is a stressful enough time without having to hunt for information that you believe to be relevant to the Confirmation application.

Get in touch - we're here to help

Harper Macleod's Private Client team can help you and your family in all circumstances.

Glasgow: 0141 227 9344                           Inverness & Highlands: 01463 795 035

Edinburgh: 0131 247 2500                         Shetland01595 695 583 

Elgin: 01343 542623

We have solicitors and offices across the country in Glasgow (next to Glasgow Central Station), Edinburgh (next to Haymarket Station), Inverness, Thurso, Elgin and Shetland - and working from home, ready to help in person or over the phone or on a zoom call. 

We can provide the assistance you need to protect your assets and your loved ones. This will allow you to put your mind at ease, knowing everything is in hand.

Useful Links

MAKING A WILL IN SCOTLAND

EXECUTRY ADMINISTRATION