Stages of the process
The key stages cover the same as the Straightforward and Intermediate cases but with one or more of the following extensions (include likely timescales).
- Special time pressure. This could be caused by the executors / administrators not having taken timely action post death, so the estate assets are now vulnerable to theft, fire, vandalism, squatters or seizure as well as interest and penalties on overdue tax. Alternatively, the deceased could have been mid-real-estate transaction as his or her death, thus necessitating an expedited Grant to complete the sale: 4-8 hours
- Will trusts arise under the deceased’s Will which the executors need preliminary guidance upon. In due course, if not terminated during the period of estate administration, this Will trust will become a separate trust matter: 4-8 hours
- The deceased benefitted from a lifetime trust, the value of which needs to be accounted for in the calculation of overall IHT payable as a result of the death. This lifetime trust matter will be separate to the estate, but the executors / administrators will still need to liaise with the lifetime trust trustees upon the inter-dependant IHT figures and consequently available reliefs both groups are supplying and claiming: 4-8 hours
- If the deceased made substantial gifts to persons or trusts other than exempt beneficiaries (usually spouses of charities) in the 14 years before their death, this could cause lifetime IHT to be payable by the recipients and or require liaison with trustees of these lifetime trusts on IHT uplift. If the executors / administrators do not ensure such lifetime IHT is settled, the liability falls on them personally so this is mandatory work: 4-8 hours
- The deceased owned foreign (non-England and Wales) assets and / or their estate was subject to foreign debts. Foreign Wills may exist: 4-8 hours
- Whether or not the deceased’s estate comprised any foreign property, the deceased had international connections necessitating an investigation of their domicile status at death: 4-8 hours
- The deceased owned commercial real estate interests. This will involve specialist valuation and there may be business property relief opportunities to IHT depending upon the ownership circumstances: 4-8 hours
- The deceased owned UK private company shares or an interest in a small business or partnership which needs to be assessed whether it qualifies for business property relief to inheritance tax: 4-8 hours
- If the deceased owned onerous property (e.g. contaminated land) or potentially onerous property such as having been a Lloyds Name or being subject to a professional indemnity run off period as at their death (e.g. they were partners in a law or accountancy firm), specialist guidance is needed on how to manage the on-going post death liability: 4-10 hours
- The deceased owned agricultural property which needs to be which needs to be assessed whether it qualifies for agricultural property relief to inheritance tax: 4-8 hours
- The deceased had invested in IHT saving investments such as life insurance bonds, life insurance based discounted gift trusts or AIM share portfolios to attract business property relief: 4-10 hours
- The deceased had high value art and / or heritage value assets (i.e. items or real estate with national, scientific, historic, artistic, scenic or architectural interest) – special IHT exemptions and treatment are potentially available for heritage assets: 4-8 hours
- If the deceased had a literary estate or was the owner of intellectual property, quantifying and managing the royalty flows will require specialist assistance: 4-8 hours
- If the deceased is a high profile person, there are likely to be reputation and Press management issues: 4-6 hours
- It is discovered that the deceased needed to correct their lifetime income tax and CGT returns. The magnitude of any extra tax, interest and penalties will depend upon the culpability of the deceased: 4-6 hours
The high complexity cases are the most difficult to estimate fees because of the range of factors that may or may not apply.
We anticipate this will take between 60 and 120 hours’ work at an average hourly rate of £250 per hour. Total estate administration costs estimated at £15,000 to £30,000 (plus VAT at 20%).
Again, the exact cost will depend on the particular circumstances of the matter and we would always negotiate and set this out to the executors / administrators at the outset and keep them appraised of developments impacting the fees estimate as the matter progresses.
We also charge an additional fee to reflect the complexity and value of the matter. This is usually 0.5% of the gross value of the estate.
Disbursements (standard extra costs) excluded, but often payable in addition: from this fee:
As above for Straightforward and Intermediate estates, but please additionally note costs relating to the services below could be due, depending upon how many high complexity factors apply. It is very difficult to quantify the value of such costs, with the level of individuality increasing in proportion to the level of complexity. However, in each we would case obtain prior consent from the executors / administrators and shop around to minimise these:
- Foreign lawyer liaison / foreign accountancy advice and foreign tax and tax related liabilities to include liaison on double-tax relief claims / foreign property expert guidance.
- Commercial real estate specialist valuation services.
- Third party specialist assistance for art / heritage property.
- Accountancy valuation work on private company shares / partnership interest / sole trader assets.
- Accountancy final return and sometimes estate return work to account for chargeable events certificates generated by life insurance bond investments plus the tax these events cause to be payable.
- Accountancy compliance work on lifetime corrective tax work.
- Public relations assistance on managing the Press in high profile deceased estates.
Potential additional costs
As above for disbursements, it is very difficult to quantify the additional time costs, but we would always again obtain prior consent from the executors / administrators and ensure these are provided at competitive market rates.
- Company / Commercial Legal Team assistance in relation to the succession of business property assets.
- The legal costs of any other members of the Haq Hamilton Solicitors team we involve with the prior consent of the executors / administrators e.g. Property Team; Family Team, Disputes Resolution Team, Criminal Team.
How long will this take?
Estates that fall within this range with only one or two high complexity factors in addition to the intermediate complexity factors could match that same time frame of being dealt with within 6–24 months from death. In all cases we target obtaining the Grant within 6 months due of the death regardless of the additional IHT work required to minimise interest on IHT which arises after the 6th month post death.
Where trusts and spin-off work such as company / partnership succession issues arise, we would always seek to separate estate administration work as far as possible so that these on-going matters can continue on a standalone basis.
Particularly difficult high complexity factors to close down promptly post death are onerous property or potentially onerous property issues and professional indemnity run-off insurance issues for deceased professionals such as lawyers or accountants. However, where possible, we would again seek to complete all other estate administration work, just leaving these difficult aspects balanced out by sensible estate retentions which retentions can hopefully be distributed when recommended retention deadlines have timed out and hopefully no calls on the retentions have arisen.