How to reconcile estate capital and income, document tax and distributions, give beneficiaries useful information and retain HMRC records.
This guide is part of ProbateHelp's Probate Process guide cluster. Estimated reading time: 10 min.
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No single statutory eight-section template applies to every private administration. The accounts must be complete, intelligible and capable of reconciliation. Their structure should reflect the estate's assets, income, liabilities, tax, distributions and residue.
Not routinely. Estate accounts are normally private administration records. However, section 25 of the Administration of Estates Act 1925 allows the court to require a full inventory and account, and accounts may become evidence in a dispute or tax enquiry.
There is no universal rule requiring every beneficiary to sign. All acting personal representatives should approve accurate accounts. Residuary beneficiaries should receive enough information to understand how the residue and their shares were calculated.
Not automatically. A receipt confirms payment and written approval is useful evidence, but its effect depends on the information supplied, its wording and the circumstances. It does not excuse concealment, error or breach of duty.
It records estate income treated as paid to a beneficiary. HMRC says no R185 is needed where estate income for the tax year is within the £500 administration-period exemption. The tax treatment also depends on whether a payment is income, residue or a legacy.
There is no universal 12-year rule for every document. GOV.UK says HMRC can ask for Inheritance Tax records up to 20 years after IHT is paid. Keep the will, tax forms, valuations, accounts, receipts and evidence of distributions accordingly.