There has been lots in the professional press lately regarding very long turnaround times for probate applications. To some extent this has spilled into the general press and last autumn gained enough traction for the Justice Select Committee to launch a call for evidence from practitioners in this area.
This attention from Westminster seems to have brought some pressure for change and a number of actions have been taken by HM Courts and Tribunals Service (HMCTS) to try and reduce their backlog.
The impact of the pandemic on the process
One area that particularly caught our eye was how HMCTS interact with HM Revenue and Customs (HMRC), which is summarised as follows:
Before the Covid-19 pandemic
The process for dealing with Inheritance Tax (IHT) involved filing an IHT return with HMRC, waiting for an IHT421 receipt from HMRC, and then submitting the IHT421 alongside the probate application, as evidence that IHT had been dealt with.
During Covid
The IHT421 was still submitted, but instead of returning it to the professional, HMRC would email a copy to the probate registry and notify the professional that they had done so, enabling the professional to apply for the grant of probate.
Post-Covid
The IHT421 was abandoned, and the probate application was moved online. HMRC would still email the probate registry to confirm that IHT had been dealt with, but without notifying or copying in the professional. Professionals were required to wait 20 working days after filing the IHT forms before applying for the grant of probate, to allow HMRC to notify HMCTS.
The current process and its limitations
Now, it's back to the future. Professionals must file the IHT with HMRC and then await a code to be sent to them confirming receipt/processing. They cannot make the application to HMCTS until they have that receipt/code.
The whole thing has the vibe of two siblings standing next to a broken window and a football, each accusing the other of having been the kicker.
If the delays really are with HMRC and not HMCTS, then this will decrease turnaround times with HMCTS, which will please the Justice Select Committee. But it will not actually do anything for consumers, who will have two waiting times instead of one, and whose advisers will be left to chase up delayed codes from HMRC rather than moving on once the 20-working day waiting period has passed.
Vision for an improved aggregated system
The sunlit uplands would seem to be an aggregated system where a combined online filing can be made, with the IHT aspects finding their way to HMRC and the application aspects to HMCTS, therefore a combined online filing system and a single online portal for professionals to track the progress of their applications. But I suspect we’re still a way off from that sort of system.
Should you be interested in finding out more about UHY’s probate and estate administration services, you can visit our page here, where you can download our brochure and see a list of individuals and offices regulated to carry out this work.
The next step
If you have any questions regarding this insight, please get in contact with Graham Boar on g.boar@uhy-cambridge.com, or your usual UHY adviser.
