Coronavirus: An update for the Personal Representatives of an Estate

As the uncertainty of the COVID-19 pandemic continues, social distancing measures have caused increasing challenges for the personal representatives (PRs) of estates. As the situation develops, new measures are frequently being implemented by both the Court (HMCTS) and HM Revenue and Customs (HMRC) to adapt their current processes during the pandemic. This article highlights some of the temporary changes that have been made to assist PRs with their role during this challenging time.

Statements of Truth have replaced Affidavits 

The President of the Family Division has announced that the use of statements of truth can replace affidavits in many more types of non-contentious probate applications and processes under the Non-Contentious Probate Rules 1987. This will remain in force until 30 July 2020. Statements of Truth are currently widely used in online probate applications and by Solicitors acting on behalf of the PRs. Replacing Affidavits with Statements of Truth is a welcome change to the process for submitting evidence to the court; many Solicitors currently do not have access to their offices, and all probate registries are closed to members of the public. This means that access to a Commissioner of Oaths is currently restricted for PRs and therefore Affidavits cannot be formally verified during this time. A Statement of Truth is not required to be signed in front of a witness or Solicitor/Commissioner of Oaths, therefore simplifying the process whilst the current restrictions are in place. This rule change may become a permanent statutory amendment in the future. 

Changes to Inheritance Tax payments. 

Inheritance tax (IHT) must be paid to HMRC six months before the end of the month of death. For example, if a person dies on 6 June 2020, the PRs will have until 31 December 2020 to pay any IHT due to HMRC. If payment is made after this date, HMRC will charge interest at a rate of 2.60%.HMRC has announced that they will no longer be accepting payments of IHT via a cheque and, instead, payments must be made via online or telephone banking, or by using the Direct Payment Scheme. If you have paid IHT since 6 April 2020 via a cheque, you should call HMRC's Inheritance Tax helpline on 03000 583 941 to ensure that they have received your payment.

Repayments of IHT back to the PRs will also no longer be paid by a cheque. Instead, they will be paid directly to a named bank account using the faster payments (FPI) system. HMRC must receive your bank account details (name of the account holder, bank account number and sort code) in writing, and the letter must be signed by either the agent acting on behalf of the PRs or by all of the PRs who signed the inheritance tax account submitted to HMRC (the IHT400 form). You should write the words 'Repayment - further details' at the top of your letter. This change is likely to be permanent rather than for the duration of the pandemic only.

Submission of Inheritance Tax Account

Due to the current social distancing measures in place, HMRC has announced emergency measures and will accept printed signatures by the PRs or trustees on forms IHT 400 and IHT 100 instead of their physical signatures. These measures will only apply if there is a professional agent acting for the PRs.

For the printed signatures to be valid, the names and personal details of the PRs or trustees must be clearly shown on the declaration page. The agent must then confirm in a clear and unambiguous statement on the IHT account that all of the PRs or trustees have seen the IHT account and that they agree to be bound by the declaration they are signing. This new measure will of course assist in filing IHT accounts with HMRC on time, avoiding the lengthy process of circulating documents to several individuals during the current crisis.

If you would like to talk through the consequences for your business, please email us and one of our team will get in touch.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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