Inheritance Tax (IHT): What Executors Need to Know

Overview

IHT exposure and reporting obligations depend on the value and composition of the estate, how assets are owned, and reliefs and exemptions that may apply. Even where no tax is payable, appropriate reporting may still be required.

Issues that frequently arise

• Valuations: property, shareholdings, business assets, and personal possessions.
• Lifetime gifts: gifts within relevant periods prior to death may be reportable.
• Jointly owned assets: may pass by survivorship but still be relevant for tax reporting.
• Reliefs and exemptions: availability depends on facts (e.g., spouse exemption, charitable giving, business/property reliefs where applicable).
• Payment timing: IHT can affect grant timing and estate liquidity.

Executor responsibilities

Executors must take reasonable care to identify taxable components; ensure correct submissions; maintain records supporting valuations and calculations; and pay estate taxes before distributing (or risk shortfall issues).

Risk management

Where the estate is complex, early organisation of documentation and valuation evidence can reduce HMRC queries and avoid unnecessary delay.

How Royce Legal can help

Royce Legal can guide executors through the legal aspects of reporting and administration, coordinate with valuation professionals as needed, and ensure estate documentation is consistent and defensible.