Death and Personal Representatives: Period of administration and ascertainment of residue: Personal representatives: how residue is ascertained
In order to ascertain residue the personal representatives must identify all the assets and liabilities of the estate. They then need to quantify these.
In the case of taxation liabilities this process will start with settling any Income Tax and Capital Gains Tax liabilities to the date of death. If any income arises to the personal representatives or if they realise any chargeable gains during the period of administration they will also need to agree their own liabilities for this period.
As far as Inheritance Tax is concerned the personal representatives will need to inform HMRC – Trusts and Estates IHT whether any liability arises and if so in what amount. As part of the process of seeking a grant of probate or letters of administration (or, in Scotland, a confirmation) the personal representatives have to supply HMRC – Trusts and Estates IHT with a provisional computation of the Inheritance Tax due. HMRC – Trusts and Estates IHT will review this and, where necessary, check valuations. When the amount, if any, of Inheritance Tax payable has been quantified HMRC – Trusts and Estates IHT will issue clearance. We would not normally accept that residue had been ascertained at a date before the date of issue of a clearance. See IHTM05001+ for detailed guidance on the Inheritance Tax procedures.