The Daily Telegraph recently carried the cautionary tale of Mr Glyne Harris who had acted as administrator of the estate of Helena McDonald.
Mr Harris filed an inheritance tax (IHT) return to HM Revenue & Customs. He paid the first tranche of tax due and transferred the bulk of the estate to a beneficiary on the understanding that the beneficiary would settle the remaining tax liability.
Unfortunately, the beneficiary then departed for Barbados and could not be contacted. Mr Harris was held liable for the unpaid tax.
According to the report, Judge Nicholas Aleksander said:
“IHT is clear. It is the personal representatives of the deceased (in this case, Mr Harris as administrator) who have the obligation to account for any inheritance tax arising in respect of the deemed transfer on death.
“It is no defence to any inheritance tax determination that Mr Harris may have transferred the assets of the estate to a beneficiary on the basis that the beneficiary would be responsible for the payment of the inheritance tax due.
“Nor is it a defence that Mr Harris was ignorant of his obligations, as a personal representative, to pay the inheritance tax owing.”
Two points arise from this sad story.
The first is that with an estate of circa £1.2m it is perhaps surprising that Mrs McDonald did not leave a valid will. Perhaps Mr Harris thought that his duties as a “mere” administrator of an intestacy were less onerous than those of a “proper” executor of a will. If so he was, of course, mistaken.
The second is that administering an estate – whether in the context of a will or an intestacy – is, as Judge Aleksander might have put it, “not simples”. On the contrary, Sergei: it is a serious matter that brings with it significant personal responsibilities. As Mr Harris discovered, dangers lie in wait for those who act without the benefit of professional advice: advice such as may be had, for example, of BKL’s probate specialists.
For more information, please take a look at our probate page, get in touch with your usual BKL contact or use our enquiry form.