This order serves to increase the ‘fixed net sum’ in paragraph (B) of case (2) of the Table in section 46(1)(i) of the Administration of Estates Act 1925(1) is to be £322,000
Translated into English, that means the value which will pass to a surviving spouse of a taxpayer who died without a will, before the remainder of that taxpayer’s estate is shared between the surviving spouse and the children of the deceased, will increase to £322,000.
Currently that amount is £270,000 making this an increase of just over 19%.
Many taxpayers are surprised that when a married person dies without a will, the surviving spouse doesn’t simply inherit everything. In part, I think that myth is perpetuated by the fact that in so many cases that’s exactly what happens.
Often there’ll be a house in joint ownership which passes to the surviving spouse not because of the intestacy rules, but because they are the surviving joint owner of the property.
Joint bank accounts are treated similarly.
Pensions or trust funds are often applied for the benefit of the surviving spouse. Again this is not because of the intestacy rules but because of the pension administrator or trustee decisions taken.
Once all that is factored out, £270,000 (soon to be £322,000) is enough to cover the remainder of the assets and to see them into the hands of the survivor.
Many UHY offices across England and Wales are regulated by the ICAEW to offer non contentious probate services as an alternative to our friends in the legal industry, and can help executors make sense of these issues in order to understand both the inheritance tax position of the deceased and the manner in which the assets ought to be divided up.
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