Tax & estate planning guide
What happens to your estate when you die?
When someone dies, their money, property and possessions need to be identified, valued and administered. Debts and taxes are dealt with before the remaining estate passes to beneficiaries under the will — or under the intestacy rules if there is no valid will.
The starting point
The estate is the money, property and possessions left by the person who died.
The personal representatives first need to identify and value relevant assets and liabilities. This can include property, bank accounts, investments, personal possessions and business interests.
Not every asset necessarily passes through probate in the same way. For example, certain jointly owned assets can pass automatically to a surviving joint owner, depending on how they are owned.
Inheritance Tax calculations can take account of matters such as certain lifetime gifts even though those assets are no longer owned at death.
Responsibility
Executors or administrators are legally responsible for dealing with the estate.
If there is a will, the executors named in it can usually apply for the legal authority needed to administer the estate. If there is no will, an eligible person — normally a close relative — can apply to become an administrator.
Executor
A person appointed under a will to administer the estate.
Administrator
A person authorised to administer an estate where the relevant grant is letters of administration.
Personal representative
The general term used for an executor or administrator responsible for the estate.
Beneficiary
A person or organisation entitled to receive something from the estate.
Legal authority
Probate may be needed before some assets can be dealt with.
In England and Wales, probate is the legal authority to deal with a deceased person's estate. Whether a grant is needed depends on the assets and the requirements of the organisations holding them.
Where there is a will and an executor applies, the document is generally a grant of probate. Other circumstances can result in letters of administration.
Where IHT is due, some tax normally has to be paid before the grant can be obtained.
Before distribution
Debts and taxes are dealt with before beneficiaries receive the remaining estate.
Personal representatives must settle relevant debts and taxes. The estate can also generate taxable income during the administration period, and selling estate assets can create Capital Gains Tax consequences.
Inheritance Tax is generally due by the end of the sixth month after the month of death. Interest can arise if payment is late.
If assets are distributed without retaining enough to meet outstanding debts or taxes, the personal representatives can potentially become personally responsible for the shortfall.
Who inherits?
A valid will directs distribution; without one, the law decides.
Once debts and taxes have been paid — or sufficient money has been retained to meet them — the remaining estate can be distributed according to the will.
If there is no valid will, the intestacy rules determine who is entitled to inherit. Those rules depend on family circumstances and should not be assumed to match what the person might have wanted.
A solicitor can advise on drafting or updating a will and on more complex family or trust arrangements.
After inheritance
Beneficiaries do not usually pay tax simply because they inherit.
Inheritance Tax is normally dealt with by the personal representatives before assets are distributed, although there are exceptions — including some lifetime gifts and trust situations.
Tax can arise later. For example, a beneficiary may pay Income Tax on income generated by inherited assets or Capital Gains Tax if an inherited asset is later sold for a gain.
Wills, ownership, beneficiary arrangements, gifts, pensions, trusts and life insurance can all affect how smoothly wealth ultimately passes to the intended people.
Estate planning
Would your financial affairs be straightforward for the people you leave behind?
We can help bring together your assets, beneficiaries and financial arrangements, while working alongside the appropriate legal and tax professionals where required.
Book a conversationThis guide covers the estate-administration framework in England and Wales and is for general information only. Scotland and Northern Ireland have different probate procedures. It is not personal legal, tax or financial advice. Estate administration and tax treatment depend on individual circumstances and rules can change. Current GOV.UK/HMRC guidance checked on 16 September 2026.