23rd July 2021

Executors: Practical aspects of obtaining Confirmation

When managing the affairs of someone who has died, you may be required to obtain Confirmation in order to administer their estate.

What is Confirmation?
Confirmation is a document granted by the Court which legally “confirms” the Executors appointed in the deceased’s Will, or, if the deceased died intestate (without leaving a Will), the Executor(s) who are appointed by petition to the Court under the Laws of Intestate Succession in Scotland. In England Confirmation is called Probate.

When is Confirmation required?
There are a number of circumstances where Confirmation is required when administering an estate. It could be to complete the transfer or sale of the deceased’s house, ingather funds from bank accounts, investments or for the sale or transfer of shares. Each institution has its own rules and thresholds for when Confirmation is required. More often than not, Confirmation is required for at least one asset.

What is required in order to apply for Confirmation?
Various information regarding the deceased, their family and the Executors are required for the application form. The form also requires an accurate picture of what assets the deceased owned and debts they owed, as at their date of passing. Assets may include a house, bank accounts, investment accounts, shares, premium bonds, property abroad and interests in any trusts. It is also important to note any cash the deceased had when they died, any car or other asset owned, e.g. a caravan or a timeshare. It is advisable to obtain a professional valuation of the house for Confirmation purposes. It may also be necessary to obtain a professional valuation of the contents within the property, in particular, if there are items of significant value, perhaps artwork or antiques. A short inheritance tax form is required as part of the application for Confirmation and, if the estate is liable to inheritance tax, professional valuations may be required and exhibited to HMRC. The tax paperwork varies depending on what assets are in the estate and whether inheritance tax is due or if there are other matters to declare to HMRC. Depending upon the circumstances, it is possible to have an estate that is not taxable but still requires reporting to HMRC before Confirmation can be obtained.

Are there any lifetime matters to be considered when applying for Confirmation?
It is important to consider if the deceased made any gifts within the last 7 years of their life. This can have consequences for the inheritance tax position of the estate if the gifts made exceeded the £3,000 annual allowance and they cannot be classed as gifts made out of regular income in the case of a taxable estate. Gifts of other assets, as well as money, can be caught and brought back into the estate when considering how much inheritance tax is due. Gifts made where the deceased didn’t fully give up possession of the asset also form part of the deceased’s estate for tax purposes (called gifts with a “reservation of benefit”). A common example of this is where the deceased transferred their house to a child in their lifetime but continued to occupy it until they died without paying rent to their child. The value of the house as at the date of death is then considered to be part of the deceased’s estate for inheritance tax purposes.

How long does it take to obtain Confirmation?
This depends on the complexity of the estate being administered. In a straightforward estate, Confirmation may be obtained in around 3-4 months. If an estate is taxable or has a large number of assets, it will usually take at least 6 months to obtain Confirmation. Where HMRC are involved in an estate, HMRC can take several months to assess the application before Confirmation can be applied for. The Court will issue Confirmation roughly 2-8 weeks upon receipt of the application, depending on which Court is involved. Once Confirmation is granted, the Executors can ingather and distribute assets in line with the terms of the Will or, per the Intestacy rules which apply when someone dies without leaving a Will.

If you need any advice about executry administration, get in touch with the Blackadders’ Private Client Teams working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.

Sienna Sproson, Associate Solicitor
Private Client
Blackadders LLP
@BlackaddersLLP

www.blackadders.co.uk

 

 

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