Administering an Estate, Step by Step

Administering an estate means collecting in what the deceased owned, paying what they owed, settling any tax, and passing the rest to the people entitled to it. The job runs in a fairly fixed order, and getting the order right matters - you cannot obtain a grant before reporting to HMRC, and you should not distribute before protecting yourself against unknown creditors.

This page is the practical companion to Executors, Administrators & the Grant of Probate, which covers who may act and the source of their authority. Here we walk through what they actually do, in sequence, for England & Wales; there is a short note on Scotland and Northern Ireland at the end.

A quick word on terminology. The person who deals with the estate is the personal representative (PR). Where a valid will appoints them, they are an executor whose authority comes from the will itself. Where there is no valid will - see intestacy - an administrator acts instead, and their authority only begins when the grant is issued. The steps are the same for both; differences are flagged where they bite.

Step 1 - Immediate steps#

First, register the death. In England & Wales this must normally be done within five days at a register office, which issues the death certificate. Order several certified copies - banks, registrars and insurers will each want to see an original.

Then secure the estate:

• Protect property and assets. Make sure the home is locked, insured and, if empty, that the insurer knows it is unoccupied. Safeguard valuables, cars and business premises.
• Locate the will and any codicils, and check for a later will that revokes an earlier one. Confirm who the executors are and that they are willing and able to act.
• Identify the PRs. If there is no will, work out who is entitled to apply as administrator under the intestacy priority order (rule 22, Non-Contentious Probate Rules 1987) - usually the spouse or civil partner, then children.
• Notify banks, utilities, pension providers, HMRC and the DWP. The Tell Us Once service reports the death to most government departments in one step.

Keep good records from day one: you will need them for the estate accounts, and PRs are personally accountable for how the estate is handled.

Step 2 - Value the estate#

Establish the value of everything the deceased owned and owed, at the date of death. This valuation drives both the inheritance tax position and the eventual distribution, so be thorough.

• Assets. Bank and savings accounts, investments, life policies (note whether written in trust - if so they fall outside the estate), the home and any other land, vehicles, chattels, and business or agricultural interests. Ask each institution for a date-of-death balance including accrued interest.
• Jointly-owned property. How a joint asset passes depends on how it was held. Property held as joint tenants passes automatically to the survivor by survivorship and does not go through the estate, though its value still counts for IHT. Property held as tenants in common passes under the will or intestacy. Check the title.
• Liabilities. Mortgages, loans, credit cards, outstanding tax, and funeral expenses.
• Lifetime gifts. Identify gifts made in the seven years before death. These may use up the The Nil-Rate Band & Transferable Nil-Rate Band before the rest of the estate and must be reported. See Inheritance Tax Exemptions & Reliefs for what is and is not counted.

For anything material - land, unquoted shares, valuable chattels - obtain a professional open-market valuation. HMRC can and does challenge under-valuations.

Step 3 - Inheritance tax#

Deal with inheritance tax before you apply for the grant. The reporting route depends on whether the estate is "excepted".

Excepted or not?#

Most estates are excepted, meaning no full IHT account is needed. For deaths on or after 1 January 2022 the old IHT205 was abolished; instead the PRs simply give the estate values as part of the probate application. Broadly, an estate is excepted where the gross value is below the The Nil-Rate Band & Transferable Nil-Rate Band (£325,000); or below £3 million and passing entirely to a spouse, civil partner or charity so that no tax is due; or a foreign-domiciled estate with limited UK assets. There are limits on lifetime gifts (£250,000) and on trust interests (£250,000) within these categories - confirm the current conditions before relying on them.

If the estate does not qualify, it is non-excepted and you must submit a full account on form IHT400 with the relevant schedules.

IHT400 and IHT421#

Complete IHT400 and its schedules - for example IHT402 to claim a deceased spouse's unused The Nil-Rate Band & Transferable Nil-Rate Band (the transferable NRB), and IHT435/IHT436 to claim and transfer the The Residence Nil-Rate Band where a home passes to direct descendants. Both allowances can materially reduce or remove the bill, so claim them where available.

Alongside IHT400 you submit IHT421, the probate summary. HMRC processes the account and sends the IHT421 (and a unique code) to HM Courts & Tribunals Service so it can be matched to your probate application. HMRC aims to issue IHT421 within about 15 working days, and advises PRs to wait 20 working days after sending IHT400 before applying for the grant, so the papers can be matched. For the tax itself and the reliefs available, see Inheritance Tax - An Overview.

Paying the tax#

IHT is due by the end of the sixth month after the month of death - so a death in March means payment by 30 September. Interest runs on anything unpaid after that. This creates the classic chicken-and-egg problem: you usually cannot access the estate's money without the grant, but you often cannot get the grant until the tax is paid.

Two mechanisms break the deadlock:

• The Direct Payment Scheme (form IHT423). Banks, building societies and (now) many investment, pension and life-policy providers will pay tax straight to HMRC from the deceased's own accounts before the grant. Send a separate IHT423 to each institution.
• Payment by instalments. Tax on land and buildings, and on certain business and unquoted-share interests, can be paid in ten annual instalments. The first still falls due at the six-month mark, and interest may apply on the outstanding balance.

Step 4 - Obtain the grant of representation#

The grant is the court document proving the PRs' authority to deal with the estate. There are two main types: a grant of probate where there is a will (issued to the executors), and letters of administration where there is not (issued to the administrator).

Apply to the Probate Registry, online or on paper, using form PA1P (with a will) or PA1A (without). You submit the original will, the death certificate, the IHT code or figures, and the fee. For a non-excepted estate, include the HMRC reference from the IHT400 process. The application includes a statement of truth in place of the old sworn oath.

Step 5 - Collect in the assets#

With the grant in hand, "call in" the estate. Send office copies of the grant to each institution and:

• close bank and savings accounts and consolidate the money into a dedicated executor's account;
• sell or transfer (assent) investments and shares;
• deal with the home - transfer it to a beneficiary by written assent, or put it on the market and sell.

Keep the estate's money separate from your own throughout. Mixing funds is a common and serious error.

Step 6 - Pay debts, expenses and legacies#

Pay the estate's debts and the administration expenses (funeral, probate fees, valuation and legal costs). If the estate cannot pay everything - an insolvent estate - a statutory order of priority applies and you must follow it; paying the wrong creditor first can leave you personally liable.

Protect yourself against unknown creditors. Before distributing, place notices under section 27 of the Trustee Act 1925 - in The Gazette and in a newspaper local to any land in the estate - giving creditors at least two months to come forward. Once the period expires, a PR who has advertised and made proper searches can distribute without personal liability to a creditor they did not know about (though the creditor may still pursue the assets in a beneficiary's hands). Consider also bankruptcy searches against beneficiaries.

Once debts are settled, pay the specific and pecuniary legacies - the particular items and fixed cash sums the will gives. What remains is the residue.

Step 7 - Income tax and capital gains tax (in outline)#

Two periods of tax often need attention beyond IHT:

• The deceased's final period. A return to the date of death may be needed to settle any income tax or CGT the deceased owed.
• The administration period. Income the estate receives after death (rent, interest, dividends) is taxable, and gains on assets the PRs sell can attract CGT. PRs have their own annual CGT exemption for the year of death and the two following tax years, and pass each beneficiary's share of income on an R185 statement. Keep these figures - they feed into the estate accounts.

This is an outline only; where the sums are significant, take specialist advice.

Step 8 - Prepare estate accounts#

Draw up estate accounts showing everything that came in, everything paid out, the tax settled, and the balance available for the residuary beneficiaries. Good accounts are the PRs' evidence that they discharged their duty properly, and the residuary beneficiaries are entitled to see and approve them.

Step 9 - Distribute the residue#

Distribute the residue to those entitled under the will or the intestacy rules. Have each residuary beneficiary approve the accounts and sign a receipt or release confirming they have received their share. Do not distribute to a beneficiary who is a minor or otherwise cannot give a good receipt without dealing with the money appropriately - often it must be held on trust.

A note on timing: PRs are not obliged to distribute before the end of one year from the date of death - the so-called "executor's year" (reflected in section 44 of the Administration of Estates Act 1925). Beneficiaries cannot generally force earlier payment, though interest may run on unpaid legacies after that point.

On clearance: PRs have historically applied to HMRC on form IHT30 for a clearance certificate confirming the IHT position is closed before final distribution. That route still exists but HMRC has prioritised IHT400 processing, so clearance can be significantly delayed. Confirm the current position and factor it into your timetable rather than assuming a prompt certificate.

Step 10 - Post-death planning#

The administration is also the last chance for some tax planning:

• Deeds of variation. Within two years of death, a beneficiary may redirect what they receive, and - if the deed so elects under section 142 of the Inheritance Tax Act 1984 (and, for CGT, section 62(6) of the Taxation of Chargeable Gains Act 1992) - the redirection is read back as though the deceased had made it. This can save IHT, skip a generation, or tidy an intestacy. All affected beneficiaries must agree.
• Handover to trustees. Where the will creates a trust - for a young beneficiary, a surviving spouse, or a discretionary class - the PRs' final act is to vest the relevant assets in the trustees (often the same people, now wearing a different hat). From there the trust takes over. See Understanding Trusts - A Plain-English Guide for how trusts work, and, for example, Discretionary Trust of Residue where the will sets up a discretionary trust.

Quick-reference timeline#

When	Step	Key point
Within 5 days	Register the death	Order several certified copies
First weeks	Secure assets; find the will; identify the PRs	Property insured; executors confirmed
Weeks 2–8	Value the estate at date of death	Include joint property and 7-year gifts
Before the grant	Report to HMRC (excepted route or IHT400/IHT421)	Claim transferable The Nil-Rate Band & Transferable Nil-Rate Band and The Residence Nil-Rate Band
By end of month 6	Pay IHT	Direct Payment Scheme (IHT423); instalments for land
After IHT (allow ~20 working days)	Apply for the grant	PA1P (will) or PA1A (intestacy)
After the grant	Collect in assets; close accounts; sell/transfer property	Use a separate executor's account
2+ months' notice	Advertise for creditors under s.27	Gazette + local paper before distributing
Ongoing	Pay debts, expenses and legacies	Follow the insolvency order if funds are short
Before final distribution	Estate accounts; deal with income tax/CGT	Beneficiaries approve the accounts
From ~12 months ("executor's year")	Distribute the residue; obtain releases	PRs need not pay out sooner
Within 2 years of death	Post-death planning; hand trusts to trustees	Deed of variation under s.142 IHTA 1984

Scotland and Northern Ireland#

The shape is similar but the process and terms differ. In Scotland, the equivalent of the grant is confirmation, obtained from the sheriff court on an inventory (form C1); PRs are executors-nominate (under a will) or executors-dative (appointed by the court), and the succession rules - including forced heirship-style legal rights - differ markedly. See Intestacy in Scotland. In Northern Ireland, the process resembles England & Wales but runs through the NI Courts and Tribunals Service; see Intestacy in Northern Ireland. Do not assume an England & Wales procedure carries across the border.

---

This page is general guidance for professionals, not legal or tax advice, and it is not a substitute for checking the estate's specific facts. Thresholds, forms and HMRC processes change; confirm the current position - including the excepted-estate conditions, IHT forms and clearance route - before you rely on any figure or step here.