Legal background to trusts and estates: interest on legacy paid late
Executors normally have a year to administer an estate. In some cases they can justify a longer period. Until then, they are not obliged to pay out legacies. They can do so if they choose. But this must not prejudice the interests of other beneficiaries. This depends on the size of the estate.
Beneficiaries who have not received their legacies may be entitled to interest. Usually this is after a year, but the period may be longer. Sometimes a will directs that interest be paid from an earlier date. It can even be from the date of death.
Such interest is income of the year in which it is paid. There is no spreading back to earlier years (SAIM2440). External customers can find this guidance at www.hmrc.gov.uk/manuals/saimmanual/SAIM2440.htm