Background

Probate delays: don’t shoot the messenger

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The factors causing a delay in the probate application system

Delays in the probate system have hit the headlines of late, with bereaved families having to wait many months to obtain a grant of probate – a stark contrast to the 16 weeks the Government says the application should take. Adding to this, further delays at HMRC can mean that estates are taking much longer to get going and also to finalise before everything can be distributed and wrapped up by the executors.

Delays in obtaining grant of probate

Staff shortages and a backlog of cases within the probate service (part of HM Courts & Tribunals Service) have worsened since the Covid-19 pandemic. This has been exacerbated by the move away from applications being submitted to experienced local probate registry teams to a centralised system.

It should be noted that for completely straightforward recent applications to the Probate Service the time taken to issue the Grant has significantly improved.

Delays with HMRC

Stringent HM Revenues & Customs (HMRC) reporting requirements and ongoing problems for tax payers trying to get through to the HMRC helpline have also added to delays. Tax may be payable at the following points:

  • inheritance tax should be paid within six months of a death;
  • income tax may be payable on assets which continue to generate income after the death until they have been transferred or sold; and
  • capital gains tax may also be payable on assets which have gone up in value since the person died or since being valued for inheritance tax.

Where inheritance tax is due, but not paid within six months of a death, HMRC charges interest at an annual rate of, currently, 7.75%, although this is variable. A grant of probate cannot be obtained without inheritance tax being paid, so in the past – unless there was enough money available in the deceased’s bank account to transfer under the Direct Payment Scheme or by realising some investments – many were forced to take out a loan to cover the inheritance tax bill, counting on the fact that they can recoup this cash through selling estate assets once probate is granted.

It is possible for personal representatives to obtain a ‘grant on credit’ – meaning they can administer the estate and access funds before inheritance tax is paid – if they find it impossible to raise the funds required to pay the inheritance tax bill. This will only be granted, however, if they can show HMRC that they have made every practical effort to raise the money; HMRC’s guidance also makes it clear that they will only issue such a grant in ‘exceptional circumstances’. The spring budget removed the requirement to have sought a loan to pay the tax, but it is unclear as yet if HMRC will be willing to allow more of these grants on credit.

Once final tax calculations for income and capital gains tax have been submitted to HMRC, along with a final payment, the executors will have to wait for confirmation from HMRC that everything is in order before the final accounts can be agreed. This final confirmation is reportedly taking between 6 and 12 months, while HMRC delays in finalising income tax and capital gains tax requirements can also result in late payment penalties or interest charges, as well as executors missing deadlines for tax advantages.

Impact on property sales

One of the most profound impacts of the probate delays is linked to inheritance tax and property sales.

Although estate assets, such as a property, can be marketed during the probate application process, none can be sold until probate is actually granted. Delays in the probate process therefore, mean that people are faced with mounting interest charges from HMRC or a loan company while they wait for probate to be granted.

Mistakes by inexperienced executors

Delays can also arise when inexperienced executors do not seek expert legal advice and fail to follow the correct process for applying for probate.

Problems and delays can also arise where disputes break out between the executors, creditors, beneficiaries or HMRC. For example, if incorrect inheritance tax figures were stated. HMRC has now introduced a system of checking the initial tax calculations and will not issue a code until they are satisfied that the initial submissions are correct. Once you have the code you can then apply to the Probate Court, but having to wait for the code is sometimes causing further delays at the beginning of the application process.

Sometimes the probate service requires more information before probate can be granted. This may be because key documents are missing, further confirmation may be required that the correct documents have been sent in, or more information is needed about the signing of the Will. Alternatively, there may be defects in the application itself, such as the beneficiary’s names on the application not exactly matching those listed in the Will.

Challenges for executors

Sometimes delays arise which are outside of everyone’s control. A solicitor frequently has to grapple with problems such as:

  • issues with the Will;
  • a reluctant or deceased executor;
  • difficulties tracing a beneficiary;
  • third-party agency delays – such as with financial institutions or valuers;
  • inheritance tax complications; and increasingly
  • disputes among beneficiaries or other family members.

All of these take time to sort out and can add to the costs of the probate process through no fault of the solicitor.

How we can help

Our team of specialist solicitors can help ease the enormous and time-consuming pressure that is placed on an executor. They will manage the entire probate process in the correct order, ensuring that all the forms are filled out correctly and gather all the documents needed to submit with the probate application.

They can intervene if disputes are holding up the process, regularly check the progress of the application with the probate service, negotiate with HMRC where needed, and help you avoid any of the many pitfalls which can hold up a grant of probate process. For further information, please contact Paddy Appleton in the Wills, Trusts & Probate team on 01733 882800 or email [email protected].

Paddy Appleton LLB TEP, Senior Partner


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