Probate is often assumed to be purely a legal process. In reality, it is just as much an accounting and tax exercise, involving valuations, inheritance tax calculations, compliance with HMRC deadlines and careful estate administration.
Below are five of the most common probate mistakes we have encountered and how an accountant‑led approach can help avoid them.
- Incorrect valuations submitted to HMRC
One of the most common probate errors is submitting inaccurate or poorly supported estate valuations, particularly for:
- Property
- Investment portfolios
- Business interests
- Loans, guarantees or overdrawn director accounts
Overvaluation of an estate can result in more Inheritance Tax being paid than necessary.
As probate practitioners, we ensure assets are valued at open market value at the date of death and can coordinate with independent valuation experts where required.
We can also reconcile figures back to bank, investment and business records, as well as prepare valuations that are robust and defensible in the event of HMRC compliance checks.
- Inheritance tax being overpaid or paid late
We regularly hear about estates where Inheritance Tax (IHT) reliefs and allowances are missed, including:
- Transferable nil‑rate bands from a pre‑deceased spouse or civil partner
- The residence nil‑rate band
- Business or Agricultural Property Relief
- Gifts and taper relief
Late payment of IHT is also common due to poor cashflow planning ahead of a person’s death.
An accountant experienced in probate will review the full history of the estate and any previous deaths related to it that may have a bearing on reliefs.
They will then identify and correctly claim all available allowances and reliefs and plan payment of IHT to avoid interest and penalties, where possible, including advising on instalment options where property or business assets are involved.
- Estate accounts prepared incorrectly
Many executors underestimate the importance of formal estate accounts, relying instead on informal spreadsheets that often do not reconcile to probate values or fail to distinguish between capital and income.
This can lead to disputes and challenges, particularly in more complex estates.
As part of probate administration, we, as accountants, will prepare:
- Full administration estate accounts
- Clear tracking of income, capital, and tax during the administration period
- Reconciliations from probate values through to final distributions
- Documentation suitable for beneficiaries and HMRC
Proper estate accounts provide transparency and reduce the risk of later disputes
- Distributing the estate before tax and liabilities are finalised
This is one of the most common mistakes made. Executors have been known to distribute assets too early, before HMRC has agreed the tax position, once all liabilities are known and clearance has been given.
This can be a costly error, as any further tax liabilities discovered or if beneficiary claims are made, executors can be personally liable.
When we advise executors on the probate process, we ensure that they retain appropriate reserves for tax, costs and contingencies.
We can also:
- Help them understand when interim distributions may be made safely
- Obtain HMRC clearances where appropriate
- Support them so that they do not breach their fiduciary responsibilities
- Executors underestimating their responsibilities
As we have pointed out, being made an executor comes with many responsibilities and personal liabilities that many people do not fully appreciate.
We are often approached only once problems arise. Instead, as licensed probate professionals, we can act as executors for the estate or take on the probate role entirely.
This includes dealing with HMRC directly, thereby reducing the administrative and emotional burden on families.
Using professional support is a sensible risk‑management decision, not an admission of difficulty.
Here to help
As accountants authorised to carry out probate work, we are well-placed to manage the financial, tax and administrative aspects of a deceased estate, either independently or alongside legal advisers where required.
If you are acting as an executor or dealing with an estate, seeking professional advice early can make a significant difference, so speak to our team.
