Working with the Residuary Estate

The residuary estate is whatever is left after the tax authorities, creditors, and beneficiaries receive payment.

Working with the Residuary Estate

Don't forget to deduct the expenses that you incurred as an executor from the residuary estate. You're not allowed to deduct any payment for your services, but hopefully the person making the will was kind enough to leave a little gift as a thank you for all your hard work.

Three things may happen to the residuary estate:

Working with the Residuary EstateThe testator may have said in their will what should happen to the residuary estate. If so, tot up how much is left after everything else has been paid from the estate, and arrange for payment to go to the named beneficiary.

Working with the Residuary EstateThe testator may leave the residue to meet the estate's tax liability. For example, the residuary estate can be used to pay back a loan taken out to pay inheritance tax prior to grant of probate.

Working with the Residuary EstateThe testator may have forgotten about the residuary estate. If this is the case, they are deemed to have died partly intestate. You must distribute this portion of the estate according to the laws of intestacy, explored in greater detail in Chapter 2.

Send the beneficiary or beneficiaries of the residuary estate a completed copy of Form R185 from HMRC. This form shows the income that the residuary estate earned during the year and any tax paid on that income. I'm sure they'll be thrilled to receive it!

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