When someone dies in Scotland, if they have left a properly written and witnessed will, the will should have named someone as executor. The executor, usually a close relative, has the legal duty of administering all of the affairs of the deceased person’s estate including paying off debts, dealing with HMRC and distributing legacies to beneficiaries named in the will.
In order to fulfil their duties as an executor, an individual must obtain Confirmation which is the legal authority required to administer the deceased person’s estate. To get Confirmation, you must compile an inventory of all the property and possessions that the estate of the deceased person includes. Getting Confirmation is done by submitting a series of forms to the local Sherriff Court. Many people choose to engage a solicitor to get Confirmation although individual executors have the right to do this themselves.
Form C1 includes the inventory of all the deceased person’s property and possessions with valuations, a list of any debts and money owed. The form must be submitted to HMRC along with form IHT400 which deals with inheritance tax. HMRC will stamp your C1 form and return it to you so that you can then submit it to the Sherriff Court. The C1 Form also requires personal details of the deceased and of the executor. If inheritance tax is due on the estate, it must be paid before Confirmation will be granted by the Court.
When an estate has a total value of £30,000 or less, it is adjudged to be a small estate, formally called an excepted estate, and a form C5 as well as C1 must be completed. You will not need to submit the C1 form with an IHT400 to HMRC for an excepted estate.
In calculating the gross value of the deceased’s estate, the executor must include the following:
– Personal possessions such as jewellery, artworks, antiques and collectibles
– The value of any property owned outright or jointly by the deceased. In the case of jointly owned property where the other joint owner is a surviving spouse or civil partner, the value of this property does not need to be included.
– Any gifts made to people in the seven years prior to death in excess of £3,000 to any one individual in a single year.
You should get property valued by an estate agent or a chartered surveyor. Other personal items with a value of more than £500 should be valued by a competent professional.
Once the executor has completed all the necessary paperwork and paid any inheritance tax due, the Court will grant Confirmation. The executor can then begin the process that is known in Scotland as ‘in-gathering’ the estate. This involves collecting together all the assets of the estate. The executor will also need to pay any money the estate owes such as bank loans, credit card balances and utility bills.
Finally the executor will be in a position to pay out any legacies to beneficiaries that have been named in the will.