Practice Area » Probate & Administration
Probate & Administration
Probate generally deals with the law relating to the Estates of deceased persons governed by the provisions of the Succession Act 1967. A person dies, either leaving a will (testate) or without a will (intestate). On death, the deceased’s assets are frozen until the appropriate Grant is extracted by the next of kin. If testate, the will shall appoint an Executor specifically to deal with the affairs of the deceased. If intestate, the obligation falls on the closest relative.
As a general rule, the evidence of the transfer of title of any asset from one person to another is effected by way of signature, for example, money is withdrawn from a Bank Account by signing a withdrawal form, a car is transferred by way of a Vehicle Registration Form, a share is sold by a Share Transfer Form, land is sold by a Land Transfer Deed, etc.
The death of that person means that the signature is no longer available and a Grant of Probate (in the case of a Will) and a Grant of Administration Intestate (in the case of no Will) is a Court Order authorising the holder of the asset (Bank Manager, Land Registry, Company Secretary, Insurance Company, etc.) to accept the signature of the person named in the Grant (Legal Personal Representative) (LPR) instead of the Deceased’ signature.
The process of extracting a Grant is reasonably straightforward. Each county has a local Probate Registrar. Once the necessary forms are prepared and signed and lodged with her, she is empowered by the Courts to issue a Grant. The necessary forms differ depending on the circumstances. However, one of the forms that the Registrar requires in all circumstances is a High Court Certificate from the Revenue Commissioners. In layman’s language this is a Clearance Certificate that the Revenue have seen a valuation of the assets of the Deceased and have either assessed tax or deferred the payment of tax.
This is obtained by the Solicitor submitting a form of a Revenue Affidavit to the Capital Taxes Branch of the Revenue Commissioners in Dublin. Two forms of taxes are payable arising from the death of a person, Probate Tax and Capital Acquisitins Tax - these are detailed below.
Topics covered include:-
Probate Tax
It is important to know that this tax no longer applies except for deaths prior to the 6th December, 2000. This amounts to 2% of the value of the Estate (Estates with a value of less than £40,000.00 on or after the 1st. of December, 1999 are exempt). The tax is payable by the Administrator and must be paid before the Revenue Commissioners will release the necessary Certificate to enable probate issue. This creates practical difficulties for the LPR (Legal Personal Representative). Generally it is overcome by the LPR approaching Banks with whom the Deceased held an account and obtaining a loan facility for the purpose of discharging the Probate Tax.
Capital Acquisitions Tax
This is a tax payable not by the Estate but by the individual beneficiary. The amount of tax is entirely dependent on two factors:-
- The relationship between the Deceased and the beneficiary. Listed hereunder are the tax thresholds for the three categories of relationship.
Gift and Inheritance Tax
For the purpose of Gift and Inheritance Tax, the relationship between the person who provided the gift or inheritance (i.e. the Disponer) and the person who received the gift or inheritance (i.e. the beneficiary), determines the maximum tax free threshold known as the “group threshold”. The Group thresholds are indexed by reference to the Consumer Price Index and the indexation factor for 2006 is 1.255. (Where aggregation of benefits from two or more group thresholds applies, the tax- free threshold may need to be revised. Relevant years where this applies are indicated with an astrix*.)
The indexed Group thresholds for 2005 and 2006 are set out in the table below.
(Note: Date of death or date of gift indicates the relevant year for the correct indexed amount)
| Group | Relationship to Disponer | Group Threshold | |
|---|---|---|---|
| 2006 (after indexation) | 2005 (after indexation) | ||
| A | Son/Daughter | €478,155.00 | €466,725.00 |
| B | Parent*/Brother/Sister/Niece/Nephew/Grandchild | €47,815.00 | €46,673.00 |
| C | Relationship other that Group A or B | €23,908.00 | €23,336.00 |
Historic CAT Rates & Thresholds
Tax Rates applicable for Capital Acquisitions Tax
Benefit taken on or after 1 December 1999 to date
| Threshold Amount | 20% |
| Excess | Nil |
NOTE: there is no reduction of charge in relation to gifts.
- Whether the beneficiary received any benefit whether by way of inheritance or gift since the 14th of December, 1988. Generally, the answer to the question is "no" and therefore the rates set out above apply directly to the benefit. If there has been a prior benefit, then the beneficiary has to seek legal advice, as the calculation of the Capital Acquisitions Tax then payable becomes somewhat complicated.
Family Home Relief
For gifts or inheritances of the family home taken on or after 1 December 1999, CAT will no longer apply provided:
- it is the principal private residence of the disponer and/or the recipient
- the recipient has been living in the house for the 3 years prior to the transfer
- the recipient does not have an interest in any other house, and
- the recipient does not dispose of the house for 6 years after the transfer
Once the necessary Certificate is issued by the Revenue Commissioners, then an application can be lodged with the local Probate Registrar.
The length of time it takes to extract a Grant of Representation is obviously dependent on the individual circumstances of the Estate. However, generally, it takes about six to eight weeks to gather sufficient information about the Estate so that the Revenue Affidavit can be completed, this requires writing to the Deceased’s Bank for Certificates of Deposit, obtaining an Auctioneer’s Valuation of any property, corresponding with the various beneficiaries to obtain details of any prior benefits obtained by them and, most importantly, obtaining their R.S.I. number.
The Revenue Commissioners are now completely computerised. They have now formally indicated that unless the Revenue and Social Insurance number of the Deceased and any beneficiaries is furnished, they will not issue the necessary Certificate.
Once the Revenue Affidavit is submitted to the Revenue Commissioners, it takes approximately two months to be processed by them.
Once the Revenue Commissioners issue the Probate Certificate, all of the other necessary forms required must be lodged in the Probate Office. The length of time taken by the Probate Office to process it varies from county to county. Generally, in Kerry, it does not take more than four weeks. However, if there are complications, the documents may be queried on a number of occasions but generally a Grant should issue not later than three months after the initial application.
Therefore, the entire process of extracting a Grant generally takes about six months. Once the Grant issues, the Solicitor has the Grant noted by the various organisations, Land Registry, Bank, etc.
Legal Fees
The costs of extracting a Grant are in accordance with a scale recommended by the Incorporated Law Society of Ireland. It generally works out at approximately 2½% of the value of the Estate, together with V.A.T. and outlays. Depending on the circumstances, the fee can be negotiated.
The outlays involved are again dependent on the circumstances but generally do not exceed €250.00. One exception relates to the issue of an Administration Bond. This is a Bond guaranteeing the administration of the Estate and is required where a person not named by the Deceased is administering the Estate. This generally is where a person dies without making a Will or if having made a Will the named Executor has died or has refused to act.
An Administration Bond is taken out with an Insurance Company who charge a once off premium of approximately €2.00 per €1,000.00 of the Estate.
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