Acting as an Executor during Covid-19
08 / 06 / 2020
Acting as an Executor for a deceased loved one is hard enough at the best of times, but the Covid-19 crisis and resulting lockdown have made many aspects of administering an estate even more challenging.
Helen Barnett summarises some of the main issues for Executors to consider.
Q: How do I register a death during lockdown?
Personal attendance at a register office is not currently required and registrars are arranging for deaths to be registered by telephone. The informant of the death is usually a family member or an executor, but in the current crisis, funeral directors are permitted to do this.
Q: How do I notify banks and building societies?
Banks have dedicated bereavement departments that can be contacted to inform of a death. Their websites should provide contact details. There should be no need for you to go into a branch to notify them.
The Death Notification Service (https://www.deathnotificationservice.co.uk/) can also be used. By entering the relevant details on the website once, you can inform a number of financial institutions of the death, rather than contacting them all individually. Not all financial institutions are signed up to this service, but it is a useful free tool.
Q: Has the deadline for payment of Inheritance Tax changed?
No formal extensions to the usual deadline for inheritance tax (“IHT“) have been granted by HM Revenue & Customs. IHT must be paid within six months from the end of the month of death, and the IHT return filed within twelve months from this date. HM Treasury have, however, confirmed that the pandemic will be regarded as within the scope of a “reasonable excuse” for late filing of the return. The industry continues to press the government on both deadlines.
Q: How should I manage assets in volatile economic conditions?
Executors will need to ensure they keep a close eye on the market and, if values of assets such as shares or real property have plummeted since the date of death, they should liaise with the beneficiaries of the estate to discuss the options available.
One option would be to sell assets. If the executors sell qualifying shares within twelve months of death, they can claim IHT “loss relief”. This allows IHT to be reassessed on the lower sale value of the shares rather than the higher probate value. IHT “loss relief” also applies in a similar way to real property which is sold by executors within four years of the date of death.
Another option is to retain the shares or property in the hope that the market recovers, with the estate benefitting from dividends and/or rental income in the meantime.
We are still available to assist Executors with all aspects of estate administration during this period and please do not hesitate to contact your usual Wedlake Bell advisor with any queries.