Post-Grant Estate Administration

Assets still have to be collected and reconciled, liabilities verified, tax settled and entitlements confirmed — roughly in that order — before beneficiaries receive their shares.

A grant of probate or letters of administration is evidence of your authority as personal representative. From the date of death until everything has been passed on to the beneficiaries (the "administration period"), you are legally responsible for the money, property and possessions: paying the debts and tax, selling what must be sold, and reporting the estate's value, income and tax liability to HMRC.

1. Take control of the assets

Send the grant, or an official copy, to every institution holding estate assets. For each one, ask for:

• the date-of-death balance or valuation already reported;
• income, interest, dividends and transactions since death;
• the requirements to close or transfer the holding; and
• a final statement showing the payment or transfer.

Reconcile what arrives against the date-of-death figures. Differences are usually explainable — accrued interest, a late dividend, a direct debit that landed after death — but every one needs to be identified and recorded, not absorbed into the estate account.

Do not treat bank, share registrar or NS&I release thresholds or timescales as legal rules. Each organisation runs its own bereavement process and can change its evidence requirements. Ask each one, in writing, what it currently needs.

Keep estate money separate and traceable from the first receipt — see the practical options in the executor bank account guide. If you act with other personal representatives, agree where assets are held, the rules for withdrawals and payments, and what to sell and when.

2. Verify liabilities before paying

Funeral costs, secured lending, household bills, tax, professional fees: reconcile every claim before paying it. A demand is not proof. Check each against contracts, statements and title documents, and consider whether anything is time-barred or disputed.

For unknown creditors, section 27 of the Trustee Act 1925 allows personal representatives to advertise an intention to distribute, requiring claims within a period fixed by the notice of at least two months. The statutory route uses The Gazette and, where the estate includes land, a newspaper circulating in the district where the land is situated. After the notice period expires, you may distribute having regard only to claims of which you had notice, and you are not liable to a person whose claim you had no notice of.

That protection has edges. Section 27 does not:

• erase the claimant's right to follow the property into the hands of whoever received it (other than a purchaser);
• protect a representative who knew of the claim when distributing; or
• remove the need for searches an intending purchaser would be advised to make.

It also does nothing for insolvency, and nothing to fix paying the wrong beneficiary. Read the statutory advertisements guide before placing or relying on a notice.

3. Settle the tax position

An estate's tax comes in layers, and each layer has its own route:

• the deceased's own position up to the date of death;
• Inheritance Tax on the estate; and
• Income Tax and Capital Gains Tax during the administration period.

Estate income

From 6 April 2024, an estate with income of all types up to £500 in a tax year does not pay Income Tax on that income as it arises. The allowance applies to each tax year of the administration with no carry-over, and to all income types except ISAs (which keep their exemption until the estate closes or for up to three years after death). If income exceeds £500, tax applies to the whole amount.

Reporting route

HMRC's informal route — a letter at the end of the administration period — is available only if all of these apply:

• the estate was valued at less than £2.5 million at death;
• total Income Tax and Capital Gains Tax due is less than £10,000; and
• you did not sell more than £500,000 of assets in any single tax year.

If the estate has chargeable income or gains and does not meet every informal-route condition, check HMRC’s current registration guidance or confirm the reporting route; registration may be required by 5 October after the tax year in which the estate first has income or gains liable to tax. Where HMRC issues a notice to file, follow that notice.

An estate with no chargeable income and no chargeable gains needs neither registration nor reporting — unless a claim for a relief or election makes a return necessary.

Capital gains

For disposals on or after 30 October 2024, personal representatives pay CGT at 24% on taxable gains (HS282). Use date-of-death values as the acquisition cost, and deduct allowable costs properly. Personal representatives have the Annual Exempt Amount in the year of death and the two following tax years — but not later. If UK-resident personal representatives dispose of UK residential property and Capital Gains Tax is due, they normally must report it through HMRC’s property account within 60 days of completion, then follow HMRC’s personal-representative payment instructions. Different reporting rules can apply to other disposals and where the deceased or estate is non-UK resident, so check the current HMRC route.

Passing a death asset to a beneficiary (an assent) is not itself a CGT charge: the beneficiary is treated as acquiring at the date-of-death value, and a later sale is taxed on their own position. A sale by the personal representatives is taxed on the estate.

Beneficiary income

Where estate income has been paid to a beneficiary, use form R185(Estate Income) to show the income and the tax treated as paid. Income covered by the £500 allowance is not taxable income for the beneficiary either, and stays off the form.

4. Property and investments: decide, don't default

Check the will, the title, beneficial ownership, the mortgage and the insurance before selling or transferring property. Joint ownership and survivorship can keep property outside the distributable estate even though its value counted for Inheritance Tax — the title and the ownership form decide, not the family's assumption.

For investments, decide deliberately between sale, transfer or appropriation. Record valuations and any beneficiary agreement. Market movement creates its own tax questions — gains, losses and reliefs — which the accounts and the tax return must reflect. The probate property sale guide covers the sale process; take advice where a sale conflicts with the will, a co-owner or a beneficiary's interests.

5. Keep estate accounts as you go

Do not reconstruct the accounts at the end — record as you administer. Estate accounts should let you and the residuary beneficiaries trace:

• date-of-death assets and liabilities;
• differences between reported values and amounts realised;
• capital receipts, estate income and gains;
• funeral, administration, debt and tax payments;
• specific and cash legacies;
• interim distributions and the retained reserve; and
• the final residue and each beneficiary's share.

There is no single statutory template for every estate. The accounts must be complete, intelligible and supported. See the estate accounts guide.

6. Distribute only when it is safe

The one-year rule is widely misquoted. Section 44 of the Administration of Estates Act 1925 says a personal representative is not bound to distribute before one year from death. It is a protection while proper administration continues — not a mandatory waiting period, and not a promise that distribution on the first anniversary is safe. It says nothing that makes every delayed legacy interest-bearing.

Before an interim or final distribution, check:

• the estate is solvent;
• known claims, tax and costs are paid or reserved;
• any section 27 notice period has expired;
• each beneficiary, or the representatives of a beneficiary who survived the deceased and later died, is identified and entitled;
• any trust, minor or missing-beneficiary issue is resolved; and
• the accounts and the reserve calculation are recorded.

There is no universal 10% or 20% reserve. Retain the amount a reasonable executor needs for this estate's unresolved liabilities, and document why.

England and Wales also has a claims window that affects timing: under section 4 of the Inheritance (Provision for Family and Dependants) Act 1975, an eligible person can apply for financial provision within six months of representation first being taken out — the grant, not the death. An application can be made even before the grant is issued, and the court can permit later ones. Distributing inside the window carries personal risk where someone might be eligible to claim; once it has passed, section 20 of the Act protects a representative from liability for not having anticipated a late, court-permitted claim — but it does not stop estate assets being recovered from the beneficiaries who received them. Where the will or intestacy may leave a family member or dependant without reasonable financial provision, take advice before distributing.

If a beneficiary cannot be found, take proportionate tracing steps and legal advice on the court, insurance or retention options. A "Benjamin order" is a court decision, not an administrative form.

7. Close the estate

Close only when the tax position, debts, accounts and distributions are complete. Obtain receipts or transfer evidence for every payment, reconcile the estate bank account, and keep the core administration record.

IHT30 can be used to apply for Inheritance Tax clearance when you believe all the tax has been paid and the values are final. A clearance certificate normally discharges the personal representatives from further liability on the assets it covers, but it has statutory exceptions — it is not a general guarantee, and it is not compulsory for every estate. The HMRC clearance guide sets out the decision.

Do not run record-keeping on a blanket "HMRC can audit for 20 years" slogan. Enquiry, assessment, claim and beneficiary periods differ. Keep records for the applicable tax and legal periods, and take advice before destroying the core file.

Frequently asked questions