If you are dealing with the estate of someone who has died, you will usually need to obtain a Grant of Probate. If the deceased was British and had assets in the UK but was domiciled overseas, you may still need to apply for this.
Whether or not you need a grant will depend on the value of assets in the estate. Unless the estate is small, it is usually the case that a Grant of Probate is needed. There is no exact value for a small estate and it will often depend on the individual rules of the banks or building societies where assets are held. Some banks require a Grant of Probate or a Grant of Letters of Administration (if the deceased did not leave a Will) for total holdings of £15,000 or less, while others have higher limits of up to £50,000.
Types of probate for UK assets in an estate
Where a Grant of Probate is required, there are two main ways this can be obtained:
- A Grant of Probate can be applied for in the usual way from the Probate Registry of England and Wales; or
- Where a grant has been obtained overseas in certain jurisdictions, it can be resealed and used in the UK. This is only possible where the country in question is in Europe or a former commonwealth country.
Applying for a Grant of Probate in the UK
The personal representative will need to establish where the deceased’s country of domicile was. If the deceased’s country of domicile was England or Wales, then a Grant of Probate can be applied for in the UK, even if they were living abroad. In some cases, an individual may choose to change their domicile if they move overseas, but they may have kept their original UK domicile.
If the deceased held substantial assets in the overseas country in which they were domiciled, then their personal representative is likely to have to obtain probate in that country.
Where assets were also held in the UK and would require a Grant of Probate, then the personal representative will need to account to HM Revenue & Customs for any Inheritance Tax which may be due before submitting a probate application to the Probate Registry.
If tax has also been paid overseas, then it will be necessary to obtain a sworn statement from an overseas official confirming that all tax due has been accounted for.
Great care needs to be taken when dealing with estates that include overseas assets because if the deceased was domiciled in the UK, Inheritance Tax will be payable on all of their assets, wherever they are held.
HM Revenue & Customs are likely to look closely at the situation to ensure that all Inheritance Tax has been accounted for.
The situation can be exceptionally complex when someone had a base overseas as well as assets in the UK, and it is highly recommended that personal representatives seek professional help from a probate expert to ensure that all tax liabilities are discharged. If a mistake is made, then executors or administrators could be held personally liable for any loss caused to the estate, even where the mistake was genuine.
If you would like to speak to one of our expert estate planners, ring us on 01634 353 658 or email us at [email protected]