Estate admin - bank account and Income Tax?

[IsThisOn?]

Grant of Probate has been obtained and the next step is the administration of the assets. After receiving some confusing advice I could do with clarity on the following points please, which are hopefully straight forward questions to those in the know:

1) What sort of bank account should be used to receive the various assets from the deceased when administering the estate? Will any current account set up by the executor for this purpose do, or does it need to be a particular type of account?

2) When advising the banks etc. holding the assets to transfer the money, exactly what additional information should they be asked to supply? I was hoping there might be a template available for this, but I haven't come across one yet. I gather that Income Tax paperwork needs to be completed, so presumably I need the details of any interest earned, at least since the date of death. Does the history need to go back further than this and should I ask for anything else?

Thank you in advance!

[PallasAthena]

No special bank account. The only requirement is that you keep the estate money separate from your own. All I did when I have been Executor is open a separate current account with my own bank with the account name "PallasAthena Executor A/c". I even had a bank card issued to me in that name. You keep the account running until the administration of the estate is completed and everything has been paid out then close it. Your bank will need to see the documents proving you are entitled to open the account: Death Certificate, an original of the grant of Probate + Will attached, photo ID and address for you - check with them what they need.

Easier to open an Executor A/c with your own bank as you are already their customer and known to them.

You have Probate so I'm assuming you have already been in touch with banks holding the assets and provided them with the death certificate and copy of the Will. Now just send them the grant of Probate and instruct them to transfer all funds to your newly opened Executor A/c and then close the accounts they hold in the name of the deceased.

Notify HMRC of the death if you haven't aleady done so - What to do after someone dies: Report the death without a Tell Us Once reference number - GOV.UK (www.gov.uk) - and they will tell you if they need additonal information or if there is income tax to pay from the estate [IHT should already have been dealt with if Probate has been obtained].

There is no simple answer to what is needed as so much depends on whether the deceased's tax affairs were up to date, how complicated they were, how large the Estate is. HMRC will tell you what they want.

[IsThisOn?]

No special bank account. The only requirement is that you keep the estate money separate from your own. All I did when I have been Executor is open a separate current account with my own bank with the account name "PallasAthena Executor A/c". I even had a bank card issued to me in that name. You keep the account running until the administration of the estate is completed and everything has been paid out then close it. Your bank will need to see the documents proving you are entitled to open the account: Death Certificate, an original of the grant of Probate + Will attached, photo ID and address for you - check with them what they need.

Easier to open an Executor A/c with your own bank as you are already their customer and known to them.

You have Probate so I'm assuming you have already been in touch with banks holding the assets and provided them with the death certificate and copy of the Will. Now just send them the grant of Probate and instruct them to transfer all funds to your newly opened Executor A/c and then close the accounts they hold in the name of the deceased.

Notify HMRC of the death if you haven't aleady done so - What to do after someone dies: Report the death without a Tell Us Once reference number - GOV.UK (www.gov.uk) - and they will tell you if they need additonal information or if there is income tax to pay from the estate [IHT should already have been dealt with if Probate has been obtained].

There is no simple answer to what is needed as so much depends on whether the deceased's tax affairs were up to date, how complicated they were, how large the Estate is. HMRC will tell you what they want.

Thank you.

[IsThisOn?]

Follow on question please!

Does the money have to stay in the nominated current account, or could you move it to a linked savings account to earn a bit of interest until it can be paid to the beneficiaries?

I'm assuming both accounts would be set up purely for use in the estate administration and not have any other money moving in or out of them.

[PallasAthena]

Yes you can open a savings account. It must have only estate money in it (no intermingling with the executor's personal money). The interest accrues to the estate (for the residual beneficiaries). A savings account is fine, but don't make investments that could down in value as they could put estate assets at risk.

Potentially interest earned is taxable but I've no experience of how this works as the estates I've been executor to have never had enough money in them for that to be an issue. If the estate is VERY large take professional tax advice, but otherwise there is probably HMRC guidance on this somewhere.

[Iamnofool]

For the estate I am administering, I have done as Pallasthena says above.

I requested bank statements of the deceased accounts going bank two years. This enabled me to sort out various subscriptions which I then cancelled, and sometimes even got refunds.
I soon had a letter from HMRC telling me no tax was owed at time of death. A year later I had a tax refund from HMRC, in connection with salary paid in after death .
If the deceased had any ISAs and there is a spouse still living, there is a special ISA allowance they can inherit, which the bank can advise you about, hopefully. So that money can be moved into the special new additional allowance ISA. Once that is set up, it can be transferred like any other ISA, to a different provider.

[IsThisOn?]

That's interesting. The account won't be used to pay any bills, just to receive and hold money until it can be distributed. Does it actually need to be a current account, or would just using an easy access savings account (set up for this purpose) be ok?

[PallasAthena]

What banks call it isn't important. As long as it is separate from your money and does what you need it to do - pay money in and out, settle bills, etc - then you can put it in any account you like. I referenced current account only because that was I did.

[Iamnofool]

I certainly found a current account was more practical, as I could pay cheques in, pay bills, refund expenses etc by bank transfer.