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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Legal background to trusts and estates: the three phases of an executor's duties

The period of administration starts with the death of the testator. It finishes when the executors have discharged all their duties. It has three phases.

Phase 1

The executors

  • arrange the deceased’s funeral
  • get details of all assets and debts
  • pay any inheritance tax that is due
  • obtain a grant of probate, recognising their lawful ownership of the assets of the deceased.

Phase 2

They bring the assets together in their hands.

Phase 3

The executors

  • pay the debts of the deceased
  • hand over, or pay out, specific bequests
  • determine what is left (ascertain the residue).

Then they pay it out to those nominated in the will (the residuary legatees). The provisions of ITTOIA/S682A (for non-corporate beneficiaries) and CTA2009/S967 (for beneficiaries within the charge to Corporation Tax) require that, if requested to do so, they provide such persons with a statement in writing showing

  • the amount treated as the beneficiary’s share of the income from the residue of the estate, and
  • the amount of tax at the applicable rate (ITTOIA/Ss670, 679(2) and (3) for non-corporate beneficiaries, and CTA2009/S952, 962(2) and (3) for corporate beneficiaries) such income is deemed to have borne.